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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549




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Form 10-K

|   |  |                                                                                           
|-- |  | ------------------------------------------------------------------------------------------
|þ  |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
	15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934    
|  
|   |  | For the fiscal year ended December 31,
	2001                                              
|  
|OR
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
	15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-25849



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OneSource Information Services, Inc.

(Exact name of registrant as specified in its
charter)


|                                                                |  |                                      
|--------------------------------------------------------------- |  | -------------------------------------
|Delaware                                                        |  | 04-3204522                           
|(State or other jurisdiction of
	incorporation or organization) |  | (I.R.S. Employer
	Identification No.)

300 Baker Avenue Concord, MA 01742

(Address of principal executive offices,
including zip code)


Registrants telephone number, including
area code:

(978) 318-4300


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

None


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

Common Stock, par value $.01 per
share


(Title of class)




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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 þ         No o

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 Annual Report on Form 10-K or any
amendment to this Annual Report on
Form 10-K.    o

The aggregate market value of voting stock held
by nonaffiliates of the registrant, based on the closing price
of the common stock on March 8, 2002 of $7.45, as reported
on the NASDAQ National Market, was approximately $55,000,000.
Shares of common stock held by each officer and director and by
each person who owns 5% or more of the outstanding common stock
have been excluded in that such persons may be deemed to be
affiliates. This determination of affiliate status is not
necessarily a conclusive determination for any other purpose.

As of March 8, 2002, the registrant had
12,039,496 shares of common stock outstanding, $.01 par value.

DOCUMENTS INCORPORATED BY REFERENCE:

OneSource Information Services, Inc.
(OneSource) intends to file its proxy statement
pursuant to Regulation 14A within 120 days of the end
of the fiscal year ended December 31, 2001. Portions of the
proxy statement are incorporated by reference into Part III
of this Annual Report on Form 10-K. In addition, OneSource
has filed a Registration Statement on Form S-1, File
No. 333-73263.



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TABLE OF CONTENTS



|                                                                                                                                 |  |  |  |  |  |  |  | 
|-------------------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|PART IV                                                                                                                         
|SIGNATURE                                                                                                                       
|ONESOURCE INFORMATION SERVICES, INC.                                                                                            
|CONSOLIDATED BALANCE SHEET (In thousands, except share data)                                                                    
|ONESOURCE INFORMATION SERVICES, INC. CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share data)                 
|ONESOURCE INFORMATION SERVICES, INC. CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (In thousands, except share data)
|CONSOLIDATED STATEMENT OF CASH FLOWS                                                                                            
|ONESOURCE INFORMATION SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                 
|REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE                                                               
|ONESOURCE INFORMATION SERVICES, INC. (In thousands)                                                                             
|SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS                                                                                  
|EX-3.01 Amended and Restated Cert. Incorporation                                                                                
|EX-23.02 Consent of PricewaterhouseCoopers LLP                                                                                  



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TABLE OF CONTENTS

|               |  |                                                                                        |    |      |    | 
|-------------- |  | -------------------------------------------------------------------------------------- | -- | ---- | -- | 
|               |  |                                                                                        |    | Page
|               |  |                                                                                        |    |     
|PART I        
|Item 1.        |  | Business                                                                               |    |      | 2  | 
|Item 2.        |  | Properties                                                                             |    |      | 9  | 
|Item 3.        |  | Legal Proceedings                                                                      |    |      | 9  | 
|Item 4.        |  | Submission of Matters to a Vote of Security
	Holders                                   |    |      | 10 | 
|PART II       
|Item 5.        |  | Market for Registrants Common Equity and
	Related Stockholder Matters                 |    |      | 10 | 
|Item 6.        |  | Selected Consolidated Financial and Operating Data                                     |    |      | 11 | 
|Item 7.        |  | Managements Discussion and Analysis of
	Financial Condition and Results of Operations |    |      | 12 | 
|Item 7A.       |  | Quantitative and Qualitative Disclosure About
	Market Risk                             |    |      | 27 | 
|Item 8.        |  | Financial Statements and Supplementary Data                                            |    |      | 28 | 
|Item 9.        |  | Changes in and Disagreements with Accountants on
	Accounting and Financial Disclosure  |    |      | 28 | 
|PART III      
|Item 10.       |  | Directors and Executive Officers of the Registrant                                     |    |      | 28 | 
|Item 11.       |  | Executive Compensation                                                                 |    |      | 28 | 
|Item 12.       |  | Security Ownership of Certain Beneficial Owners
	and Management                        |    |      | 28 | 
|Item 13.       |  | Certain Relationships and Related Transactions                                         |    |      | 28 | 
|PART IV       
|Item 14.       |  | Exhibits, Financial Statement Schedules, and
	Reports on Form 8-K                      |    |      | 29 | 
|Signature Page |  |                                                                                        | 31 |     

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PART I

Item 1. Business

Except for historical information contained
herein, the matters discussed in this Annual Report on
Form 10-K are forward-looking statements that involve risks
and uncertainties. OneSource makes such forward-looking
statements under the provision of the Safe Harbor
section of the Private Securities Litigation Reform Act of 1995.
Any forward-looking statements should be considered in light of
the factors described below in Part II, Item 7 under
Certain Factors that May Affect Future Results.
Actual results may vary materially from those projected,
anticipated or indicated in any forward-looking statements. In
this Annual Report on Form 10-K, the words
anticipates, believes,
expects, intends, future,
could, and similar words or expressions (as well as
other words or expressions referencing future events, conditions
or circumstances) identify forward-looking statements.

General

OneSource provides primarily Web-based business
and financial information products to professionals who need
quick access to timely and reliable company, industry, and
market intelligence. OneSources primary products, the
OneSource® Business BrowserSM products, are
password-protected, subscription-based products that provide
sales, marketing, finance, and management professionals and
consultants with industry and company profiles, research
reports, media accounts, executive listings and biographies, and
financial information on over one million public and private
companies. OneSource customers access this information over the
Internet using standard Web browsers. As a Web-based solution,
the Business Browser product line does not require the purchase
of additional computer hardware by the customer. OneSource also
distributes its CorpTech® high-technology company database
as part of the Business Browser product line, as part of CD
Roms, and through third party distributors.

OneSource uses its own proprietary classification
system, which is referred to as the KeyIDSM taxonomy,
to associate, link, and integrate numerous, disparate sources of
information that OneSource licenses and uses in its products.
Using its KeyID taxonomy, OneSource integrates over 2,500
information sources that are made available from more than 25
information providers and OneSources own CorpTech
high-technology company database. The information providers
provide both textual information, such as news, business and
trade articles, SEC filings, executive listings and profiles,
industry intelligence, and analyst reports; and numeric
information, such as company financial statements, stock quotes,
and industry statistics.

The OneSource product line also includes the
AppLinkSM application programming interface toolkit.
The Applink application programming interface toolkit lets
Business Browser customers access Business Browser content from
within their internal applications. These customer applications
may be internally developed or utilize third party software, and
typically apply to corporate intranets, portals, or customer
relationship platforms. OneSource has formed a number of
alliances to enhance the integration and marketing of Business
Browser content in third party software platforms. OneSource
believes that the flexibility of its customers to access, use,
and embed information from the Business Browser products as part
of their own internal applications is an important trend and
requirement.

OneSource products are designed to address the
information needs of leading professional and financial services
firms, technology companies, and other large organizations.
OneSources primary target market consists of Global 5000
business-to-business companies in the technology, professional
services, and financial services industries with not less than
500 employees and $250 million in sales, and that employ
large direct sales forces. Representative customers include
Compaq Computer Corporation, Deloitte & Touche LLP,
Oracle Corporation, SAP America, Inc., and Sun Microsystems,
Inc. OneSource customers use the OneSource products for such
purposes as account prospecting and management (i.e., business
development), competitive and peer analysis, company tracking
and monitoring, and company and industry research.

As of December 31, 2001, 817 organizations
subscribed to our Web-based Business Browser product line,
compared to 869 as of December 31, 2000. On average, our
customers for Web-based Business Browser products as of
December 31, 2001 had an annualized contract value of
$68,700 per customer, compared to an average annualized contract
value of $67,200 per customer as of December 31, 2000. As
of December 31, 2001, 42 organizations subscribed to
the AppLink application programming interface toolkit. Such
customers as of December 31, 2001 generated, on average,
approximately $380,000 each in annualized contract value.

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The aggregate annualized contract value of
Business Browser product contracts was $56.1 million as of
December 31, 2001, compared to $58.3 million as of
December 31, 2000. Of this $56.1 million,
$45.4 million was attributable to those customers that were
under contract as of both December 31, 2000 and 2001. The
renewal rate for subscribers of the Business Browser product
line as of December 31, 2001 was 68% calculated on a dollar
basis, whereas the renewal rate for those subscribers that also
use the AppLink application programming interface toolkit as of
December 31, 2001 was 85% calculated on a dollar basis
(Annualized contract value is described in more detail in
Part II, Item 7  Managements
Discussion and Analysis of Financial Condition and Results of
Operations).

OneSources business is not seasonal to any
significant extent. As a percentage of total invoiced fees,
invoiced fees in the fourth quarter of the fiscal year have
exceeded invoiced fees in other quarters for the corresponding
fiscal year. However, this percentage has declined over the last
three fiscal years and does not represent seasonality to any
significant extent. During the fourth quarter of fiscal years
2001, 2000, and 1999, OneSource invoiced 31%, 38%, and 46% of
total invoiced fees for each fiscal year, respectively.
OneSource attributes this primarily to the budgeting cycles of
its customers.

OneSource was incorporated in Delaware in July
1993 under the name Datext Holding Corporation. In May 1998,
OneSource sold its CD-Insurance division to allow OneSource to
focus more completely on its Web-based product line. On
October 1, 1999, OneSource acquired Corporate Technology
Information Services, Inc., a Delaware corporation located in
Woburn, Massachusetts. Corporate Technology Information
Services, Inc. is a provider of high technology company profiles
with a focus on emerging private companies. For more information
regarding the sale of OneSources CD-Insurance division and
the Corporate Technology Information Services, Inc. acquisition,
see Part II, Item 7  Managements
Discussion and Analysis of Financial Condition and Results of
Operations  Overview. OneSources principal
executive offices are located at 300 Baker Avenue, Concord,
Massachusetts, 01742, and its telephone number is
(978) 318-4300. OneSources common stock is traded on
the NASDAQ National Market System under the symbol
ONES and its Web address is www.onesource.com.

Products

The OneSource Business Browser product line is
designed to be a comprehensive, efficient, and easy to use
business and financial information resource for professionals
who require quick access to reliable company, industry, and
market intelligence. OneSource customers generally use OneSource
products for such purposes as account prospecting and management
(i.e., business development), competitive and peer analysis,
company tracking and monitoring, and company and industry
research.

The Business Browser products integrate over
2,500 sources of business information from more than
25 business and financial information providers. These
sources include textual information, such as company profiles,
news, business and trade articles, SEC filings, executive
listings and biographies, industry intelligence, and analyst
reports; and numeric information, such as company financial
statements, stock quotes, and industry statistics. OneSource
uses its proprietary KeyID taxonomy to sort, categorize, link,
and integrate information on over one million worldwide public
and private companies.

Business Browser products are accessible to
licensed users through a standard Web browser that is likely
available and familiar to users. OneSource customers require
minimal installation and systems support, and users can access
the Business Browser products at any time via the Internet. In
addition, the AppLink application programming interface toolkit
enables Business Browser product subscribers the option to
access Business Browser content via their corporate intranets,
portals, or customer relationship platforms.

OneSource concentrates on the functional uses of
the business and financial information that it integrates and
makes available to users. The Business Browser product line has
been designed for use not only by traditional users of business
information, but also throughout an organization, including
sales forces, professional service and consulting staffs,
marketing and new business development executives, financial
analysts, and purchasing personnel. OneSource applies its
knowledge of how business professionals use information in order
to transform raw, disparate data into information that is
integrated, meaningful, and actionable. OneSource specializes in
integrating and presenting information in such a manner that the
user can efficiently interpret, analyze, and problem solve.
OneSource uses the feedback of its users in deriving and
enhancing its products user interface and functionality in
order to make its products easy to use, and to enable users to
become productive quickly with minimal training.

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The Business Browser product line is generally
available to a specified number of users in a customer
organization at a fixed annual subscription fee that declines on
a per-user basis as the total number of users increases.
OneSource also offers each customer an enterprise-wide license
that allows for an unlimited number of Business Browser product
users within the customers organization for a fixed annual
subscription fee.

The Business Browser product line includes:

GLOBAL BUSINESS BROWSER. Global Business Browser
was introduced because business professionals require global
perspectives to complement detailed coverage of local markets.
Global Business Browser is available in three editions. Global
Business Browser, US Edition is a single, integrated resource
that delivers integrated information on over 385,000 North
American and global companies. Global Business Browser, European
Edition includes both European and global content with over
497,000 companies profiled. Global Business Browser, UK edition
is an integrated resource including both UK and global content
with more than 484,000 companies profiled.

US BUSINESS BROWSER. US Business Browser is
focused specifically on public and private companies in the US
and Canada. It contains a subset of business, financial, and
industry information from Global Business Browser, US Edition.
It covers approximately 300,000 public and private companies in
the US and Canada. OneSource makes available in-depth content on
Canadian companies for an additional subscription fee.

EUROPEAN BUSINESS BROWSER. European Business
Browser provides users with an integrated database on more than
405,000 public and private companies across Europe, including
50,000 UK companies. European Business Browser is available in
two configurations, European Business Browser Select and
European Business Browser Standard. European Business Browser
Select comprises a subset of the content and functionality that
European Business Browser Standard contains. European Business
Browser Select contains a fewer number of financial variables
that are available for screening purposes and financial
information only for the current year. European Business Browser
Standard contains up to 3 years of detailed financial
information for European companies and up to 5 years for UK
companies.

UK BUSINESS BROWSER. UK Business Browser is an
integrated source of information on up to 400,000 public and
private companies in the UK. UK Business Browser is available in
two configurations, a 100,000 companies edition and a 400,000
companies edition. In addition, OneSource makes available
in-depth content on UK quoted companies for an additional
subscription fee.

US COMPANY BROWSER. US Company Browser is focused
specifically on public and private companies in the US and
Canada. It comprises a subset of the business and financial
information and functionality that US Business Browser contains.
It covers approximately 300,000 companies in the US and Canada.

Revenues contributed by the Business Browser
product line during each of the last three fiscal years were as
follows: $56.3 million for the year ended December 31,
2001; $47.3 million for the year ended December 31,
2000; and $31.8 million for the year ended
December 31, 1999. Such information is also included in
Part II, Item 6  Selected Consolidated
Financial and Operating Data, and Part II,
Item 8  Financial Statements and
Supplementary Data in this Annual Report on Form 10-K.

The Business Browser product line delivers
information in an integrated format. This allows customers to
obtain different types of information from multiple sources
through a single, easy to use interface. Business Browser
products organize data around business applications, and
transform raw, disparate data into meaningful, actionable
information, delivered according to the characteristics that
users have defined and in the custom formats, tables, and
reports that users require. Users that wish to perform detailed
analysis can also easily transfer certain quantitative data into
spreadsheets or other desktop tools, such as contact management
software.

Examples of some of the core functions of the
Business Browser product line are as follows:



| |   |                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------
| |  | Profile a public or private company for a
	business summary, current news, financial reports, corporate
	affiliations, and executive listings.

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| |   |                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------
| |  | Research an industry to measure a market, list
	major participants, or review articles or reports on market
	share and trends.
|
| |  | Identify companies by industry, geography, size,
	or other key characteristics.                                               
|
| |  | Research a topic and find the latest news,
	analyst reports, and trade information.                                           
|
| |  | Learn whos who in the executive arena.                                                                                       
|
| |  | Track the latest news and product information on
	competitors.                                                                

Additional Software Applications

Two additional optional software applications
that are available for Business Browser products for additional
subscription fees are as follows:

BUSINESS BROWSER AP. Business Browser AP is an
advanced Web-based quantitative analysis tool available as an
add-on option with all of the Business Browser products other
than European Business Browser. Business Browser AP lets users
screen across a wide range of public company financial statement
items, ratios, growth rates, and other criteria. It also allows
users to produce detailed quantitative reports of their own
design. Business Browser AP also enhances the readability of
documents filed with the Securities and Exchange Commission by
removing confusing computer codes, formatting tables for easy
viewing and printing, and allowing users to export tables to
spreadsheets.

APPLINK APPLICATION PROGRAMMING INTERFACE
TOOLKIT. The AppLink application programming interface toolkit
consists of software that allows customers to easily access
Business Browser content, such as company profiles, news,
business and trade articles, analyst reports, executive
biographies, industry intelligence, and financial data, without
use of the Business Browser product interface and for use with
customers intranet or other third party software
applications such as prospect and customer databases, sales
force automation tools, enterprise reporting software and
corporate Web applications. No special client software, other
than a standard Web browser and dedicated servers, are necessary.

Legacy and Other Products

Prior to the introduction of the Business Browser
product line in 1996, OneSource distributed business information
on CD Rom. At the end of 2000, all OneSource CD Rom products,
with the exception of the OneSource CorpTech CD Rom products,
were completely phased out.

With the acquisition of Corporate Technology
Information Services, Inc. in October 1999, OneSource acquired
several product lines that include CD Rom and printed
directories. The printed directories product line was
discontinued at the end of 2000.

Product and Platform Development

OneSource employs four teams that contribute to
the commercialization and research and development of OneSource
products and their underlying technology platforms as follows:
the Packaged Solutions Team, the Embedded Solutions Team, the
Content Team, and the Engineering Team.

The Packaged Solutions Team (formerly the Global
Strategic Web Applications Team) consists of product managers
who supervise the specification, maintenance, and enhancement of
functionality, user interface, product workflow, format and look
of reports, and information required for the Business Browser
products. In addition, a new team, referred to as the Embedded
Solutions Team, was created in fiscal year 2001. This
teams role is to further develop and enhance the AppLink
application programming interface toolkit offering and the
functionality sought by the customer base and target market
seeking embedded solutions for their internal systems and
applications. The development of the UK and European products
was transferred to personnel at OneSources corporate
headquarters in the US from developers in the UK during 2001.
This move was intended to ensure and enhance consistency and
efficiency in the overall development of OneSources
products, which share common workflow and functionality.

The Content Team analyzes and evaluates third
party data sources and acquires the information required for
OneSources products. This team also includes database
engineers who receive content feeds from information providers
and write database loader code. In addition, the Content Team
comprises a group that maintains and enhances the proprietary
KeyID taxonomy and database. The KeyID taxonomy is used to
associate and integrate information on public and private
companies worldwide provided by OneSources

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different information sources. Each source
provides its database to OneSource with identifiers for
companies unique to that source. The Content Team also manages
the multiple SIC codes and industry mappings that are assigned
to companies from the different information sources, and
reclassifies these SIC codes and industry mappings assigned to
companies into consistent categories. The Content Team further
maintains and enhances a list of company name synonyms as part
of the OneSource taxonomy to allow users to perform searches in
OneSource products by the use of commonly used alternative
company names. In total, the KeyID database contains
approximately 1.1 million companies, 1.7 million synonyms,
and 40,000 Uniform Resource Locators.


The Engineering Team is responsible for
developing, deploying, and maintaining the functionality, core
technologies, and underlying architecture that support the
OneSource product line. This team researches and qualifies third
party software such as database engines, operating systems and
platforms, and emerging industry standards such as XML and
Simple Object Access Protocol. The Engineering Team further
includes a group that focuses on overall product quality
including rigorous process control, development cost, and
adoption of best practices. Finally, the Engineering Team
contains product support engineers who work closely with the
product teams to ensure that functionality and support
requirements are understood, prioritized, and developed
according to agreed upon timeframes and requirements.

Operating expenses relating to product and
platform development during each of the last three fiscal years
were as follows: $8.4 million for the year ended
December 31, 2001; $8.8 million for the year ended
December 31, 2000; and $8.0 million for the year ended
December 31, 1999. OneSource plans to increase its
investment in product and platform research and development in
the future to a greater extent than in the past. Specifically,
OneSource intends to increase year over year funding by
approximately 10% for fiscal year 2002.

Information and Providers

OneSource Business Browser products integrate and
include an array of carefully selected financial, company,
industry, executive, and news-related content from over 2,500
sources provided by more than 25 information providers and the
proprietary OneSource CorpTech high-technology company database.
OneSource enters into contracts with its information providers
in order to license their information. These license agreements
allow OneSource to integrate and distribute the information as
part of OneSources on-line products.

OneSources contracts with its information
providers are generally for multi-year terms and typically
automatically renew for additional one-year periods in the
absence of prior notice of termination. In addition, these
contracts allow for termination under certain circumstances
including contract breaches. Royalties under these contracts are
typically calculated and paid as a flat percentage of OneSource
revenues, as a fee based on the number of licensed users that
declines as the number of authorized users of the product
increases, as a fixed fee per period, or in some cases, as a
calculated fee based upon product growth compared to like
periods from the prior year. Royalties are generally paid on a
quarterly basis to information providers.

The information contained in the OneSource
Business Browser products is updated at varying frequencies
depending on the nature of data. For example, news-related
information is updated frequently throughout the day whereas
portions of the information databases on company and executive
profiles are updated on either a weekly, monthly, quarterly, or
semi-annual basis. In any case, OneSource attempts to ensure
that the information contained in its products is updated no
less frequently than each information provider makes the
information available to its own customers or to other
distributors.

Alternative supply sources exist for the
information that OneSource licenses from information providers.
However, consolidation in the information industry is an ongoing
trend, and there is no assurance that alternative supply sources
will continue to exist. The nature and relative importance of
any given database in OneSources products varies.
OneSource attempts to secure longer-term rights for certain more
critical databases where alternative supply sources are limited.
Some of OneSources information providers include Comtex
News Network, Inc., the US and UK business units of Dun &
Bradstreet Corp., The Gale Group, Thomson Financial Inc., and
Market Guide Inc. (a subsidiary of Multex.com, Inc.).

Intellectual Property

OneSource owns and controls copyrights,
trademarks, trade names, trade secrets, confidential
information, and other intellectual property rights that are
important to OneSources business. Specifically, OneSource
believes that the following are important to OneSource: its
CorpTech high-technology company

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database; its KeyID taxonomy; the trade secrets
relating to its products; the OneSource logo and related marks;
each of the OneSource names, related names, and
brands; and its source code. OneSource is licensed to access and
use certain technology and other intellectual property that are
owned and controlled by third parties. Likewise, third parties
are licensed to access and use certain technology and other
intellectual property that are owned and controlled by
OneSource. OneSources contracts with its information
providers typically state that the information providers agree
to defend, indemnify, and hold OneSource harmless with respect
to any third party claim alleging that the licensed data
infringes any trade name, trademark, copyright, or other
proprietary right of any third party. OneSource believes these
industry standard indemnities are sufficient to protect it from
claims of infringement relating to the intellectual property
that it licenses, but there can be no assurance that these
indemnities will be adequate. OneSource considers its
copyrights, trademarks, trade names, service marks, databases,
software, and other intellectual property to be proprietary, and
OneSource relies on a combination of copyright, trademark, trade
secret, patent, and confidentiality and contract safeguards to
ensure adequate protection. OneSource has filed and/or
registered trademarks and copyrights in the US and the European
Union. OneSource believes that its intellectual property does
not infringe upon the proprietary rights of third parties.


Alliances

In 2001, OneSource continued to form alliances
with various companies that sell technology solutions to similar
corporate end-users as OneSource targets and whose products and
services complement those of OneSource. OneSources
strategy in identifying and forming alliances with other
companies is to extend the possibilities for access to the
information from OneSource products by ensuring compatibility
with, and the integration of such information into, other third
party software applications. These applications generally focus
on corporate intranets, portals, and customer relationship
management platforms. In addition, the alliances intend to
increase marketing reach and awareness whereby OneSource and its
allies each generally have the right to promote interest in the
products of each other and to provide referrals to one another.

Examples of alliances that OneSource has formed
include those with the following corporations: SageMaker, Inc.
(a subsidiary of Divine Inc.), an enterprise information portal
solutions provider; Pivotal Corporation, a provider of customer
relationship management, business marketing, and service
solutions; ONYX Software Corporation, a provider of
enterprise-wide customer-centric e-business solutions; and
Industri-Matematik International Corporation, a provider of
software products designed to address customer service needs of
distribution-intensive businesses. OneSource believes that its
ability to provide access to its products through other third
party applications is an important component to its growth
strategy, and it expects to continue to selectively form
alliances in the future.

Customers

OneSource does not rely upon any single customer,
or a few customers, such that a loss of any one or a few
customers would have a material effect on OneSources
business. As of December 31, 2001, OneSource had 817
corporate customers. No one customer contributed over 3% of
annual revenues, and 342 customers comprised 80% of annualized
contract value. OneSources primary target market consists
of Global 5000 companies and specifically business-to-business
companies in the technology, professional services, and
financial services industries with not less than 500 employees
and $250 million in sales, and that employ large direct
sales forces. As of December 31, 2001, approximately 67%,
or $37.4 million, of total annualized contract value for
OneSource Business Browser products came from Global 5000
customers. In addition, as of December 31, 2001,
approximately 29%, or $16.3 million, of total annualized
contract value for OneSource Business Browser products came from
customers who subscribe to the OneSource AppLink application
programming interface toolkit.

Sales and Marketing

OneSource markets its products through a field
and telephonic sales force and a support and marketing staff.
Sales and marketing employees are located primarily in the US
and the UK. OneSource also has formed several alliances to help
in the promotion and marketing of its products.

As of December 31, 2001, OneSource incurred
sales and marketing expenses in the amount of
$18.4 million, compared to $20.5 million incurred at
the end of fiscal year 2000 and $13.3 million at the end of
fiscal year 1999. OneSource anticipates that sales and marketing
expenses will increase in the future. Specifically, OneSource
expects that sales and marketing expenses will increase by
approximately 10% for

7



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fiscal year 2002 as OneSource invests in programs
designed to fulfill the needs of its Global 5000 customers and
target market.


Customer Service & Support

OneSource provides customer support in the form
of on-site, electronic mail, and telephone support for
customers. OneSource employs field support consultants, who
assist customers with various administrative and technical tasks
such as managing product trials, training, registering end
users, promoting product-related awareness, and providing
consulting services for projects including the customization of
Web pages, the building of prototype applications using the
AppLink application programming interface toolkit, and other
technical projects.

OneSource also employs telephone-based customer
support representatives in the US and in the UK. These
representatives operate the telephone help desk that is open
from 8:00 a.m. to 8:00 p.m., local time, Monday through Friday.

Website Technology and Operations

OneSource makes its on-line products available
through a hosting facility managed by Exodus, a Cable &
Wireless Service (a division of Cable and Wireless plc), a third
party hosting vendor. The hosting facility is located in San
Jose, California. Exodus provides facilities management services
including continuous monitoring, multiple high-volume access
lines to the Internet, uninterrupted power supplies, generators,
physical security, and protection from disaster. In the first
half of 2002, OneSource intends to activate a second hosting
site in Medford, Massachusetts, which will also be managed by
Exodus, in order to make OneSources on-line products
highly available to users, to provide near real time back-up and
continuous availability in the event of component failure or
outage at one of the facilities, and to enhance Web site
performance by balancing the load of OneSources entire
user base between the two hosting sites based upon the global
location of a user. OneSources on-line products are
generally available 24 hours a day, 7 days a week.

OneSource also has a production data center at
its corporate headquarters located in Concord, Massachusetts.
This data center is used to process data feeds from information
providers, distribute this data to the live sites, and serve as
the physical facility where all of OneSources
pre-production/development and internal computing resources are
located. OneSource has taken a number of steps to keep its data
center operational in the event of emergency. These steps
include the use of a diesel standby generator, an automatic
FM200 fire suppression system, and uninterruptible power
supplies and electrical power filters. Redundant cooling
capacity is also in place. All systems are under maintenance
contracts. Additionally, there are separate security and access
restrictions as well as in-house operational staff.

Competition

The business information services industry is
intensely competitive. Several of OneSources information
providers compete against each other and in some cases with
OneSource. OneSource faces direct or indirect competition from
numerous companies, including the following:



| |   |                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | large, well-established providers of proprietary
	business and financial information, such as Dow Jones &
	Co., Pearson PLC, Reuters Group PLC, and McGraw-Hill Companies
	Inc.                                         
|
| |  | aggregators of business and financial
	information, such as LexisNexis, The Dialog Corporation,
	Factiva, NewsEdge Corporation, and Bureau Van Dijk Computer
	Services SA.                                              
|
| |  | providers of company information, such as
	Disclosure Incorporated, Market Guide Inc. (a Multex.com
	subsidiary), Hemscott Group Ltd., and Hoovers, Inc.                                                                
|
| |  | providers of sales, marketing, and credit
	information, such as Dun & Bradstreet Corp., infoUSA Inc.,
	and Siebel Systems, Inc.                                                                                         
|
| |  | Web retrieval, Web portal companies,
	and other free or low-cost mass market on-line information
	services, such as TerraNetworks, S.A., Yahoo! Inc., AOL-Time
	Warner, Inc., MarketWatch.com, and TheStreet.com, Inc.

Several of these competitors offer products or
services similar to those of OneSource and in some cases at
lower prices. The principal competitive factors in the
information services industry are availability of

8



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comprehensive, timely, integrated, and reliable
business and financial information; product ease of use; support
and training capabilities; financial, technical, and marketing
resources; brand recognition; and product price/performance
characteristics. OneSource differentiates itself from its direct
and indirect competitors in terms of product features and ease
of use; target market and geographical focus; data integration
capabilities; corporate selling skills; and customer support
services.


Laws and Government Regulations

OneSource is subject, both directly and
indirectly, to laws and government regulations relating to the
Internet and OneSources Web-based information products.
There are currently few laws or government regulations directly
applicable to Web-based information products or the Internet.
Some existing laws we believe may be applicable to Web-based
information or the Internet, albeit indirectly, are those that
relate to, but are not limited to, property rights, libel, and
personal privacy. However, due to the increasing use of the
Internet for information-based solutions and company and
industry research, laws and government regulations may be
adopted that are directly applicable to Web-based information
products and the Internet. For example, these laws and
government regulations may address user privacy, taxation, and
product quality. In order to comply with such laws and
government regulations and maintain its competitive position in
the information services industry, OneSource may need to
increase capital expenditures and adjust its pricing structure.

Employees

As of December 31, 2001, OneSource employed
239 employees (including 232 full-time employees and 7 part-time
employees), compared to 257 at the end of fiscal year 2000
(including 248 full-time employees and 9 part-time employees).
The reduction in headcount relates primarily to a restructuring
in July and November 2001 that resulted in total in an 11%
reduction in the overall OneSource workforce at that point in
time. OneSource employees are not represented by any collective
bargaining organization. OneSource has never experienced a work
stoppage, and believes that its relationships with its employees
are generally satisfactory.

Geographic Information

OneSource conducts its business globally through
two geographic locations: the United States and the United
Kingdom. OneSource had revenues of $14.9 million,
$10.8 million, and $8.0 million from the UK business,
and $44.1 million, $41.1 million and $27.5 million
from the US business, for the years ended December 31,
2001, 2000, and 1999, respectively.

The operations in the United Kingdom are subject
to the usual risks inherent in doing business in countries
outside of the US, including potential higher costs,
unanticipated regulatory changes, political instability,
difficulties in staffing and managing operations, adverse tax
consequences, currency and exchange rate fluctuations, and
seasonal reductions in business activity. In addition, the
impact of cultural differences may result in product and service
offerings that may not satisfy the needs of OneSource customers
and that may not be profitable. Further, possible
nationalization, expropriation, and unique laws pertaining to
the collection and provision of certain types of information on
individuals (e.g., the Data Protection Act) may hinder
operations out of the UK location.

Item 2. Properties

OneSources headquarters are currently
located in approximately 50,900 square feet of office space
located in Concord, Massachusetts. The office space has been
leased through June 2004. OneSource leases additional office
space in New York, NY; San Francisco, CA; Manhattan Beach, CA;
Richardson, TX; Woking, England; and London, England. OneSource
believes that its existing facilities are adequate to meet
current requirements, and that suitable additional or substitute
space will be available as needed.

OneSource deems the buildings, machinery and
equipment used in its operations (whether owned or leased),
generally to be in good condition and adequate for the purposes
for which they are used.

Item 3. Legal Proceedings

OneSource is not a party to any material legal
proceedings.

9



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##### Table of Contents



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

No matters were submitted to a vote of our
security holders during the fourth quarter of the year ended
December 31, 2001.

PART II

Item 5. Market for Registrants Common
Equity and Related Stockholder Matters

OneSources common stock is traded on the
NASDAQ National Market System under the symbol ONES.
Public trading of OneSources common stock commenced on
May 19, 1999.

(A) Market Price of Common
Stock

The following table sets forth the high and low
closing prices as reported by the NASDAQ National Market for the
periods indicated.

|               |  |      |       |      |  |      |      |     |  |   |       |  |  |   |      | 
|-------------- |  | ---- | ----- | ---- |  | ---- | ---- | --- |  | - | ----- |  |  | - | ---- | 
|               |  |      |       |     
|               |  | 2001 |       | 2000
|               |  |      |       |     
|               |  | High |       | Low  |  | High |      | Low
|               |  |      |       |      |  |      |      |    
|First quarter  |  | $    | 10.13 |      |  | $    | 4.88 |     |  | $ | 14.25 |  |  | $ | 6.75 | 
|Second quarter |  | $    | 8.98  |      |  | $    | 5.01 |     |  | $ | 10.50 |  |  | $ | 5.25 | 
|Third quarter  |  | $    | 10.10 |      |  | $    | 7.10 |     |  | $ | 12.75 |  |  | $ | 6.88 | 
|Fourth quarter |  | $    | 9.90  |      |  | $    | 6.82 |     |  | $ | 13.00 |  |  | $ | 7.25 | 




The quotations represent inter-dealer quotations,
without adjustments for retail markups, markdowns, or
commissions, and may not necessarily represent actual
transactions. The number of record holders of OneSources
common stock at March 4, 2002 was 68.

(B) Use of Proceeds from
Sales of Registered Securities

OneSource has not declared or paid any cash
dividends on its common stock and presently intends to retain
its future earnings, if any, to fund the development and growth
of its business and, therefore, does not anticipate paying any
cash dividends in the foreseeable future.

In May 1999, OneSource completed an initial
public offering, (the Offering) of 3,636,000 shares
of its common stock, of which 2,500,000 shares were issued and
sold by OneSource, and 1,136,000 shares were issued and sold by
certain stockholders of OneSource.

The net proceeds to OneSource from the Offering,
after deducting underwriting discounts and commissions and other
offering expenses, was approximately $27.0 million.

The net proceeds from the Offering, less
$6.8 million used to payoff long-term debt and
$7.6 million used to acquire Corporate Technology
Information Services, Inc., have been invested in interest
bearing, investment grade securities.

(C) Recent Sales of
Unregistered Securities

During the year ended December 31, 1999,
OneSource issued the following securities that were not
registered under the Securities Act of 1933, as amended:

Grants of Stock Options

In February 1999, OneSource granted options to
purchase 40,700 shares of its common stock at an exercise price
of $2.19 per share, 30,525 shares of its common stock at an
exercise price of $5.90 per share, and 329,467 shares of its
common stock at an exercise price of $9.93 per share.

Exercise of Stock Options

From January 1, 1999 to December 31,
1999, OneSource issued 415,538 shares of its common stock at
exercise prices ranging from $0.12 to $2.18 for an aggregate
purchase price of approximately $419,000 pursuant to the
exercise of employee stock options.

10



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##### Table of Contents



No underwriters were involved in the foregoing
sales of securities. Such sales were made in reliance upon an
exemption from the registration provisions of the Securities Act
set forth in Rule 701 promulgated thereunder. All shares
issuable upon exercise of stock options have been registered by
OneSource on a Registration Statement on Form S-8.



|        |                                                    
|------- | ---------------------------------------------------
|Item 6. | Selected Consolidated Financial and
	Operating Data

The consolidated statements of operations data
provided for the years ended December 31, 2001, 2000, and
1999, and the consolidated balance sheet data as of
December 31, 2001 and 2000, are derived from, and are
qualified by reference to, our audited consolidated financial
statements, which are included elsewhere in this Annual Report
on Form 10-K. The consolidated statements of operations
data for the years ended December 31, 1998 and 1997, and
the consolidated balance sheet data as of December 31,
1999, 1998, and 1997, are derived from audited consolidated
financial statements, which are not included in this Annual
Report on Form 10-K. The following consolidated financial
data should be read in conjunction with the Consolidated
Financial Statements and the Notes thereto, and
Managements Discussion and Analysis of Financial
Condition and Results of Operations included elsewhere in
this Annual Report on Form 10-K.

|                                                   |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |  
|-------------------------------------------------- | ----------------------------------------------------- | ------------------------------------- | ----------------------------------------------- | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | -
|                                                   |                                                       |                                      
|                                                   |                                                       | Year ended December 31,              
|                                                   |                                                       |                                      
|                                                   |                                                       | 2001                                  |                                                 | 2000   |        | 1999   |        | 1998   |        | 1997  
|                                                   |                                                       |                                       |                                                 |        |        |        |        |        |        |       
|                                                   |                                                       |                                      
|                                                   |                                                       | (In thousands, except per share data)
|Statement of Operations Data:                      |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|Revenues: (1)                                      |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                   | Web-based product                                     |                                       | $                                               | 56,318 |        |        | $      | 47,275 |        |        | $      | 31,822 |        |        | $      | 16,058 |        |        | $      | 3,312  |       
|                                                   | CD Rom product and other                              |                                       |                                                 | 2,699  |        |        |        | 4,614  |        |        |        | 3,726  |        |        |        | 14,370 |        |        |        | 27,072 |       
|                                                   |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                   |                                                       |                                       | 59,017                                          |        |        |        | 51,889 |        |        |        | 35,548 |        |        |        | 30,428 |        |        |        | 30,384 |       
|                                                   |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|Cost of revenues:                                  |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                   | Web-based product                                     |                                       |                                                 | 16,431 |        |        |        | 15,536 |        |        |        | 13,143 |        |        |        | 7,863  |        |        |        | 2,401  |       
|                                                   | CD Rom product and other                              |                                       |                                                 | 2,065  |        |        |        | 2,373  |        |        |        | 1,666  |        |        |        | 5,792  |        |        |        | 10,444 |       
|                                                   |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                   |                                                       |                                       | 18,496                                          |        |        |        | 17,909 |        |        |        | 14,809 |        |        |        | 13,655 |        |        |        | 12,845 |       
|                                                   |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                   |                                                       | Gross profit                          |                                                 |        | 40,521 |        |        |        | 33,980 |        |        |        | 20,739 |        |        |        | 16,773 |        |        |        | 17,539 |       
|                                                   |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|Operating expenses:                                |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                   | Selling and marketing                                 |                                       |                                                 | 18,447 |        |        |        | 20,519 |        |        |        | 13,254 |        |        |        | 11,577 |        |        |        | 9,167  |       
|                                                   | Platform and product development                      |                                       |                                                 | 8,360  |        |        |        | 8,842  |        |        |        | 7,996  |        |        |        | 6,313  |        |        |        | 6,375  |       
|                                                   | General and administrative                            |                                       |                                                 | 5,889  |        |        |        | 5,079  |        |        |        | 5,474  |        |        |        | 3,847  |        |        |        | 3,401  |       
|                                                   | Restructuring                                         |                                       |                                                 | 660    |        |        |        |       |        |        |        |       |        |        |        |       |        |        |        |       |       
|                                                   | Amortization of goodwill and other intangible
	assets |                                       |                                                 | 1,480  |        |        |        | 1,503  |        |        |        | 376    |        |        |        |       |        |        |        |       |       
|                                                   |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                   |                                                       |                                       | Total operating expenses                        |        |        | 34,836 |        |        |        | 35,943 |        |        |        | 27,100 |        |        |        | 21,737 |        |        |        | 18,943 |  
|                                                   |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                   |                                                       |                                       | Income (loss) from operations                   |        |        | 5,685  |        |        |        | (1,963 | )      |        |        | (6,361 | )      |        |        | (4,964 | )      |        |        | (1,404 | )
|Interest income (expense), net                     |                                                       |                                       | 853                                             |        |        |        | 887    |        |        |        | 47     |        |        |        | (595   | )      |        |        | (930   | )     
|Gain on sale of product line                       |                                                       |                                       |                                                |        |        |        |       |        |        |        |       |        |        |        | 12,797 |        |        |        | 501    |       
|Other income                                       |                                                       |                                       |                                                |        |        |        | 2,000  |        |        |        | 2,000  |        |        |        |       |        |        |        |       |       
|                                                   |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                   |                                                       |                                       | Income (loss) before income taxes               |        |        | 6,538  |        |        |        | 924    |        |        |        | (4,314 | )      |        |        | 7,238  |        |        |        | (1,833 | )
|Provision for income taxes                         |                                                       |                                       | 1,882                                           |        |        |        | 66     |        |        |        | 133    |        |        |        | 250    |        |        |        |       |       
|                                                   |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                   |                                                       |                                       | Net income (loss)                               |        |        | 4,656  |        |        |        | 858    |        |        |        | (4,447 | )      |        |        | 6,988  |        |        |        | (1,833 | )
|Less: income attributable to Class P common
	stock |                                                       |                                       |                                                |        |        |        |       |        |        |        |       |        |        |        | 1,367  |        |        |        | 414    |       
|                                                   |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                   |                                                       |                                       | Net income (loss) attributable to common
	stock |        | $      | 4,656  |        |        | $      | 858    |        |        | $      | (4,447 | )      |        | $      | 5,621  |        |        | $      | (2,247 | )
|                                                   |                                                       |                                       |                                                 |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       

11



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##### Table of Contents



|                           |                                                     |                                       |   |      |        |      |   |      |        |      |   |       |       |  |   |      |       |  |   |       |       | 
|-------------------------- | --------------------------------------------------- | ------------------------------------- | - | ---- | ------ | ---- | - | ---- | ------ | ---- | - | ----- | ----- |  | - | ---- | ----- |  | - | ----- | ----- | 
|                           |                                                     |                                      
|                           |                                                     | Year ended December 31,              
|                           |                                                     |                                      
|                           |                                                     | 2001                                  |   | 2000 |        | 1999 |   | 1998 |        | 1997
|                           |                                                     |                                       |   |      |        |      |   |      |        |     
|                           |                                                     |                                      
|                           |                                                     | (In thousands, except per share data)
|Earnings (loss) per share: |                                                     |                                       |   |      |        |      |   |      |        |      |   |       |       |  |   |      |       |  |   |      
|Class P common stock:      |                                                     |                                       |   |      |        |      |   |      |        |      |   |       |       |  |   |      |       |  |   |      
|                           | Basic and diluted earnings per share                |                                       |   |     |        |      |   |     |        |      |   |      |       |  | $ | 1.91 |       |  | $ | 0.57  |      
|                           | Weighted average Class P common shares
	outstanding |                                       |   |     |        |      |   |     |        |      |   |      |       |  |   | 718  |       |  |   | 718   |      
|Common stock:              |                                                     |                                       |   |      |        |      |   |      |        |      |   |       |       |  |   |      |       |  |   |      
|                           | Basic earnings (loss) per share                     |                                       | $ | 0.37 |        |      | $ | 0.07 |        |      | $ | (0.50 | )     |  | $ | 0.85 |       |  | $ | (0.34 | )    
|                           | Diluted earnings (loss) per share                   |                                       | $ | 0.34 |        |      | $ | 0.06 |        |      | $ | (0.50 | )     |  | $ | 0.59 |       |  | $ | (0.34 | )    
|                           | Weighted average common shares outstanding:         |                                       |   |      |        |      |   |      |        |      |   |       |       |  |   |      |       |  |   |       |      
|                           |                                                     | Basic                                 |   |      | 12,424 |      |   |      | 11,509 |      |   |       | 8,822 |  |   |      | 6,641 |  |   |       | 6,545 | 
|                           |                                                     | Diluted                               |   |      | 13,519 |      |   |      | 13,509 |      |   |       | 8,822 |  |   |      | 9,563 |  |   |       | 6,545 | 

|                                                 |  |                                                 |        |      |  |      |        |      |  |      |        |   |  |   |        |   |  |   |         |  
|------------------------------------------------ |  | ----------------------------------------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | - |  | - | ------- | -
|                                                 |  |                                                
|                                                 |  | December 31,                                   
|                                                 |  |                                                
|                                                 |  | 2001                                            |        | 2000 |  | 1999 |        | 1998 |  | 1997
|                                                 |  |                                                 |        |      |  |      |        |      |  |     
|                                                 |  |                                                
|                                                 |  | (In thousands, except number of customers data)
|Balance Sheet Data:                              |  |                                                 |        |      |  |      |        |      |  |      |        |   |  |   |        |   |  |   |         |  
|Cash and cash equivalents                        |  | $                                               | 18,162 |      |  | $    | 17,338 |      |  | $    | 13,598 |   |  | $ | 8,665  |   |  | $ | 341     |  
|Working capital (deficit)                        |  |                                                 | 2,399  |      |  |      | 1,827  |      |  |      | (691   | ) |  |   | (2,118 | ) |  |   | (9,792  | )
|Total assets                                     |  |                                                 | 53,543 |      |  |      | 58,832 |      |  |      | 49,698 |   |  |   | 27,646 |   |  |   | 16,644  |  
|Total debt (including capital lease obligations) |  |                                                 |       |      |  |      | 33     |      |  |      | 234    |   |  |   | 6,936  |   |  |   | 8,171   |  
|Deferred revenues                                |  |                                                 | 27,144 |      |  |      | 29,229 |      |  |      | 24,222 |   |  |   | 18,022 |   |  |   | 15,748  |  
|Total stockholders equity (deficit)             |  |                                                 | 16,000 |      |  |      | 16,353 |      |  |      | 13,363 |   |  |   | (6,311 | ) |  |   | (13,613 | )
|                                                
|Other Data for Web-based Products:               |  |                                                 |        |      |  |      |        |      |  |      |        |   |  |   |        |   |  |   |         |  
|Annualized contract value (2)                    |  | $                                               | 56,077 |      |  | $    | 58,354 |      |  | $    | 38,743 |   |  | $ | 25,920 |   |  | $ | 8,973   |  
|Number of customers                              |  |                                                 | 817    |      |  |      | 869    |      |  |      | 583    |   |  |   | 445    |   |  |   | 233     |  
|Average annualized contract value per customer   |  | $                                               | 68.7   |      |  | $    | 67.2   |      |  | $    | 66.5   |   |  | $ | 58.2   |   |  | $ | 38.5    |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In 1998 and 1997, OneSource divested two CD Rom
	product lines. Revenues attributable to these divested product
	lines, which are included in the statement of operations data
	through the divestiture date, were $2.6 million and
	$6.3 million in the years ended December 31, 1998 and
	1997, respectively.                                                                                                                                            
|   
|(2) | Annualized contract value represents the invoiced
	fees for one month for all customer contracts for Web-based
	products in effect at the measurement date, multiplied by 12,
	without regard to the actual remaining duration of such
	contracts. For more information regarding annualized contract
	value, see Part II, Item 7 
	Managements Discussion and Analysis of Financial
	Condition and Results of Operations  Annualized
	Contract Value.



|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
	of Financial Condition and Results of Operations

This section should be read in conjunction with
the Selected Consolidated Financial and Operating
Data and OneSources Consolidated Financial
Statements and the Notes thereto appearing elsewhere in this
Annual Report on Form 10-K.

The following discussion contains forward-looking
statements that involve risks and uncertainties. OneSource makes
such forward-looking statements under the provision of the
Safe Harbor section of the Private Securities
Litigation Reform Act of 1995. Any forward-looking statements
should be considered in light of the factors described below in
Item 7 under Certain Factors that May Affect Future
Results. Actual results may vary materially from those
projected, anticipated or indicated in any forward-looking
statements. In this Annual Report on Form 10-K, the words
anticipates, believes,
expects, intends, future,
could, and similar words or expressions (as well as
other words or expressions referencing future events, conditions
or circumstances) identify forward-looking statements.

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Overview

OneSource provides primarily Web-based business
and financial information products to professionals who need
quick access to timely and reliable company, industry, and
market intelligence. OneSource was formed as a division of Lotus
Development Corporation in 1987 and became an independent
company when it was purchased in a management buy-out in 1993.
Until December 1996, OneSources business was to provide
business information to the financial community using CD Rom
technology as the primary method of distribution. The
introduction of the Business Browser product line in December
1996 marked a fundamental shift in the business as OneSource
began a transition away from its legacy CD Rom business and
toward Web-based products. The OneSource Business Browser
product line is designed to be a comprehensive and easy-to-use
business and financial information resource, integrating over
2,500 sources of business information from more than 25 business
and financial information providers and OneSources own
CorpTech high-technology company database. The OneSource product
line also includes the AppLink application programming interface
toolkit. The AppLink application programming interface toolkit
lets Business Browser customers access Business Browser content
from within their own internal applications. These applications
may be internally developed or utilize third party software, and
typically apply to corporate intranets, portals, or customer
relationship platforms.

On October 1, 1999, OneSource acquired
Corporate Technology Information Services, Inc., a Delaware
corporation located in Woburn, Massachusetts. Corporate
Technology Information Services, Inc. is a provider of high
technology company profiles with a focus on emerging private
companies. Pursuant to the terms of an Agreement and Plan of
Merger, the consideration paid by OneSource was
$7.6 million in cash. For financial statement purposes,
this acquisition was accounted for as a purchase and,
accordingly, the results of operations of Corporate Technology
Information Services, Inc. subsequent to October 1, 1999
have been included in OneSources consolidated statements
of operations.

In May 1998, OneSource sold its CD-Insurance
division to allow OneSource to focus more completely on its new
Web-based product line. OneSource recognized a gain of
$12.8 million on this sale during 1998. In addition, in
connection with the disposition, OneSource licensed certain of
its CD Rom software to the acquiror in exchange for
$4.0 million of license fees. These license fees were paid
in eight equal quarterly installments beginning January 1,
1999 and ending on December 31, 2000 and were recognized
ratably as other income. For each of the years ended
December 31, 2000 and December 31, 1999, OneSource
recorded $2.0 million of other income related to the
software license agreement.

Revenues from both CD Rom and Web-based products
consist of monthly subscription fees from customer contracts.
Customer contracts span varying periods of time but are
generally for one year, are renewable for like periods, and are
payable in advance. Subscription fees generally are quoted to
clients on an annual basis but are earned as revenues on a
monthly basis over the subscription period. Invoices are
recorded as accounts receivable until paid and as deferred
revenues until earned. Deferred revenues attributable to
Web-based products decreased 6% to $26.8 million as of
December 31, 2001 from $28.5 million as of
December 31, 2000 and increased 18% from $22.8 million
as of December 31, 1999.

Cost of revenues consists primarily of royalties
to information providers and, to a lesser extent, employee
salaries and benefits, facilities allocation and related
expenses, depreciation associated with computers for data
processing and on-line requirements and Web hosting expenses.
OneSource enters into contracts with information providers,
which are generally for a term of at least one-year and are
automatically renewable if not canceled with advance notice.
These contracts may be terminated under certain circumstances.
Under these agreements, royalties are generally paid on a
quarterly basis to information providers. Royalties are
generally calculated either as a flat percentage of our
revenues, as a per-user fee that declines as the number of
authorized users of the product increases, as a fixed fee per
period, or in some cases, we pay a calculated fee based upon
product growth compared to like periods from the prior year.
Royalties are recorded as deferred subscription costs and are
expensed as revenues are earned over the term of the contract
period.

Selling and marketing expense consists primarily
of employee salaries and benefits and sales commissions paid to
our sales force, customer support organization, and marketing
personnel, as well as facilities allocation and related
expenses, direct marketing promotional materials, trade show
exhibitions and advertising. Sales commissions are paid when
customers are invoiced and are recorded as deferred subscription
costs, which are amortized ratably over the term of the
contract, typically 12 months, as the associated revenues
are recognized. All other selling and marketing costs are
expensed as incurred.

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Platform and product development expense consists
primarily of employee salaries and benefits, facilities
allocation and related expenses, as well as outside contractor
expenses, relating to the development of our
platform of core software supporting our products
and the development of new products based upon that platform.
Platform and product development expense includes expenses
relating to the editorial staff that implements our KeyID
taxonomy to integrate disparate information sources into our
Web-based products.

General and administrative expense consists
primarily of employee salaries and benefits, facilities
allocation and related expenses associated with OneSources
management, finance, purchasing, human resources, legal,
management information systems, and administrative groups.

Critical
Accounting Policies, Significant Judgements and
Estimates

OneSources discussion and analysis of its
financial condition and results of operations are based upon
OneSources consolidated financial statements, which have
been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these
financial statements requires OneSource to make estimates and
judgments that affect the reported amounts of assets,
liabilities, revenues, and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis,
OneSource evaluates its estimates based on historical experience
and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under
different assumptions or conditions.

OneSource believes the following accounting
policies are most critical to fully understanding and evaluating
our financial results, as well as the areas of more significant
judgments and estimates used in the preparation of its
consolidated financial statements:

Revenue Recognition.OneSources products are sold on
a subscription basis pursuant to customer contracts that span
varying periods of time but are generally for a period of one
year. OneSource initially records receivables and defers the
related revenue when persuasive evidence of an arrangement
exists, fees are fixed or determinable, and collection is
reasonably assured. Revenues are recognized ratably over the
related subscription period beginning when access to products is
granted to the customer in accordance with customer agreements.
This policy significantly reduces subjectivity in determining
the timing of revenue recognition.

Software Development Costs.Platform and product development
costs, other than certain software development costs, are
charged to expense as incurred. OneSource has adopted Statement
of Position (SOP) 98-1, Accounting for the
Costs of Computer Software Developed or Obtained for Internal
Use, which requires research and development costs
associated with the application development stage to be
capitalized for internal use software. Management is required to
use professional judgment in determining whether development
costs meet the criteria in SOP 98-1 for immediate expense or
capitalization. Management periodically reviews the carrying
value of the projects that have been capitalized to determine if
impairment may exist. If it is determined that the carrying
value of the asset has been impaired, the value would be reduced
by a charge to operations in the amount of the impairment.

Deferred Subscription Costs.Deferred subscription costs represent
sales commission and royalty costs that are associated with
securing a subscription and procuring information to be
delivered over the subscription period, respectively. These
costs are deferred and amortized ratably over the associated
subscription period as a component of selling and marketing
expense and cost of revenues, respectively. If a contract
relating to the procurement of information used in our product
was terminated prematurely, for any reason, expense recognition
may be accelerated and incurred sooner than originally
anticipated.

Allowance For Doubtful Accounts.OneSource assesses collectibility of
accounts receivable based on a number of factors including, but
not limited to, past transactions history with the customer and
the credit worthiness of the customer. OneSource does not
request collateral from its customers. OneSource maintains
allowances for doubtful accounts for estimated losses resulting
from the inability of its customers to make required payments.
If the financial condition of OneSources customers were to
deteriorate, resulting in an impairment of their ability to make
payments, additional allowances may be required.

Intangible Assets.Intangible assets consist of goodwill,
trademark, non-compete agreement, subscriber list, and a
database. Intangible assets are amortized using the
straight-line method over a period of three to seven years,
based on the estimated useful life. The carrying value of the
intangible assets is reviewed on a quarterly basis for the
existence of facts or circumstances both internally and
externally that may suggest impairment. OneSource determines
whether an impairment has occurred based on gross expected
future cash

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flows and measures the amount of the impairment
based on the related future estimated discounted cash flows. To
date, no such impairment has occurred. Factors which we consider
important that could trigger an impairment review include the
following: significant underperformance relative to expected
historical or projected future operating results and significant
negative industry or economic trends. The cash flow estimates
used to determine the impairment, if any, contain
managements best estimates, using appropriate and
customary assumptions and projections at the time. In accordance
with Statement of Financial Accounting Standards
(SFAS) No. 142, Goodwill and Other
Intangible Assets, the Company will cease amortization of
goodwill as of January 1, 2002 and, thereafter, will
annually review the goodwill for potential impairment using a
fair value approach.


Income Tax.OneSource records a valuation
allowance to reduce its deferred tax assets to the amount that
is more likely than not to be realized. At December 31,
2001, OneSource has provided a valuation allowance for the full
amount of its net deferred tax asset. While OneSource has
considered future taxable income and ongoing prudent and
feasible tax planning strategies in assessing the need for the
valuation allowance, in the event OneSource were to determine
that it would be able to realize its deferred tax assets in the
future in excess of its net recorded amount, an adjustment to
the deferred tax asset would increase net income in the period
such determination was made.

Results
of Operations

The following table sets forth, for the periods
indicated, the percentage of total revenues represented by each
line item in OneSources consolidated statement of
operations. We can give no assurance that the indicated trends
in revenues or operating results will continue in the future.

|                                  |                                                       |                          |    |      |     |      |    |    |     |  |     |    |     | 
|--------------------------------- | ----------------------------------------------------- | ------------------------ | -- | ---- | --- | ---- | -- | -- | --- |  | --- | -- | --- | 
|                                  |                                                       |                         
|                                  |                                                       | Year ended December 31,?
|                                  |                                                       |                         
|                                  |                                                       | 2001                     |    | 2000 |     | 1999
|                                  |                                                       |                          |    |      |     |     
|                                  |                                                       |                         
|                                  |                                                       | (Percentage of total    
|                                  |                                                       | revenues)               
|Revenues:                         |                                                       |                          |    |      |     |      |    |    |     |  |     |   
|                                  | Web-based product                                     |                          |    | 95   | %   |      |    | 91 | %   |  |     | 90 | %  
|                                  | CD Rom product and other                              |                          |    | 5    |     |      |    | 9  |     |  |     | 10 |    
|                                  |                                                       |                          |    |      |     |      |    |    |     |  |     |   
|                                  |                                                       | Total revenues           |    |      | 100 |      |    |    | 100 |  |     |    | 100 | 
|                                  |                                                       |                          |    |      |     |      |    |    |     |  |     |   
|Cost of revenues:                 |                                                       |                          |    |      |     |      |    |    |     |  |     |   
|                                  | Web-based product                                     |                          |    | 28   |     |      |    | 30 |     |  |     | 37 |    
|                                  | CD Rom product and other                              |                          |    | 3    |     |      |    | 5  |     |  |     | 5  |    
|                                  |                                                       |                          |    |      |     |      |    |    |     |  |     |   
|                                  |                                                       | Total cost of revenues   |    |      | 31  |      |    |    | 35  |  |     |    | 42  | 
|                                  |                                                       |                          |    |      |     |      |    |    |     |  |     |   
|Gross profit                      |                                                       |                          | 69 |      |     |      | 65 |    |     |  | 58  |   
|Operating expenses:               |                                                       |                          |    |      |     |      |    |    |     |  |     |   
|                                  | Selling and marketing                                 |                          |    | 31   |     |      |    | 39 |     |  |     | 37 |    
|                                  | Platform and product development                      |                          |    | 14   |     |      |    | 17 |     |  |     | 23 |    
|                                  | General and administrative                            |                          |    | 10   |     |      |    | 10 |     |  |     | 15 |    
|                                  | Restructuring                                         |                          |    | 1    |     |      |    |   |     |  |     |   |    
|                                  | Amortization of goodwill and other intangible
	assets |                          |    | 3    |     |      |    | 3  |     |  |     | 1  |    
|                                  |                                                       |                          |    |      |     |      |    |    |     |  |     |   
|Income (loss) from operations     |                                                       |                          | 10 |      |     |      | (4 | )  |     |  | (18 | ) 
|Interest income, net              |                                                       |                          | 1  |      |     |      | 2  |    |     |  |    |   
|Other income                      |                                                       |                          |   |      |     |      | 4  |    |     |  | 6   |   
|                                  |                                                       |                          |    |      |     |      |    |    |     |  |     |   
|Income (loss) before income taxes |                                                       |                          | 11 |      |     |      | 2  |    |     |  | (12 | ) 
|Provision for income taxes        |                                                       |                          | 3  |      |     |      |   |    |     |  |    |   
|                                  |                                                       |                          |    |      |     |      |    |    |     |  |     |   
|Net income (loss)                 |                                                       |                          | 8  | %    |     |      | 2  | %  |     |  | (12 | )%
|                                  |                                                       |                          |    |      |     |      |    |    |     |  |     |   

Comparison of Results for The Years Ended
December 31, 2001 and 2000

Revenues.Total
revenues increased 14% to $59.0 million for the year ended
December 31, 2001 from $51.9 million for the year
ended December 31, 2000.

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Web-based product revenues increased 19% to
$56.3 million for the year ended December 31, 2001
from $47.3 million for the year ended December 31,
2000. The increase in Web-based product revenues was primarily
attributable to the addition of new customers, an increase in
the number of user seats subscribed to by existing customers,
and the sale of new product subscriptions to existing customers.
At the same time, CD Rom product and other revenues, which
consist of licensing royalties, printed directories, and mailing
lists, decreased 42% to $2.7 million in 2001 from
$4.6 million in 2000, and was primarily the result of the
discontinuance of the printed directories product line,
OneSources completion of its transition away from its
legacy CD Rom business at the end of 2000, and OneSources
focus on its Web-based product line.

Cost of Revenues.Total cost of revenues increased 3% to
$18.5 million for the year ended December 31, 2001
from $17.9 million for the year ended December 31, 2000.
The increase in total cost of revenues was principally due to
increased royalty expense, computer hosting costs, depreciation
expense associated with computer equipment used for data
processing and on-line requirements, and software cost
amortization. As a percentage of total revenues, total cost of
revenues decreased to 31% in 2001 from 35% in 2000. The decrease
as a percentage of total revenues was primarily the result of an
increase in total revenues, a lower effective royalty rate to
information providers, and lower production-related expenses.

Cost of Web-based product revenues increased 6%
to $16.4 million for the year ended December 31, 2001
from $15.5 million for the year ended December 31,
2000. This increase in cost of Web-based product revenues was
primarily due to increased royalty expense, computer hosting
costs, depreciation expense associated with computer equipment
used for data processing and on-line requirements, and software
cost amortization. As a percentage of Web-based product
revenues, cost of Web-based product revenues decreased to 29% in
2001 from 33% in 2000, and was principally due to an increase in
Web-based product revenues, a lower effective royalty rate to
information providers, and lower production-related expenses.

Cost of CD Rom product and other revenues
decreased 13% to $2.1 million for the year ended
December 31, 2001 from $2.4 million for the year ended
December 31, 2000. This decrease in the cost of CD Rom
product and other revenues was primarily due to lower costs
associated with the discontinuance of our printed directories
product line and a decrease in CD Rom costs attributable to
OneSources discontinuance of its legacy CD Rom product
line at the end of 2000. As a percentage of CD Rom product and
other revenues, cost of CD Rom product and other revenues
increased to 77% in 2001 from 51% in 2000, primarily due to
costs associated with the maintenance and expansion of
OneSources proprietary database.

Selling and Marketing Expense.Selling and marketing expense
decreased 10% to $18.4 million for the year ended
December 31, 2001 from $20.5 million for the year
ended December 31, 2000 principally due to decreased
recruiting expense, compensation related expenses, travel
expenses, and outside services. In part, this overall decrease
in selling and marketing expense was largely the result of cost
reduction measures implemented at the beginning of the third
quarter of 2001. Selling and marketing expense decreased as a
percentage of total revenues to 31% in 2001 from 39% in 2000.
OneSource expects sales and marketing expenses to increase as a
percentage of revenues as it intends to invest in programs
focused on its Global 5000 customers and target market.

Platform and Product Development Expense.Platform and product development
expense decreased 5% to $8.4 million for the year ended
December 31, 2001 from $8.8 million for the year ended
December 31, 2000. The decrease was primarily the result of
lower compensation related expenses. As a percentage of total
revenues, platform and product development expense decreased
from 17% in 2000 to 14% in 2001. In part, this overall decrease
was the result of cost reduction measures implemented during the
second half of 2001. OneSource anticipates platform and product
development expenses will increase as a percentage of revenues
as it develops its next generation foundation, tools and
products focused on meeting the demands of its Global 5000
customers and target market.

General and Administrative Expense.General and administrative expense
increased 16% to $5.9 million for the year ended
December 31, 2001 from $5.1 million for the year ended
December 31, 2000. The increase was primarily due to higher
compensation related costs. General and administrative expense
as a percentage of total revenues was 10% in 2001 and 2000.
OneSource anticipates general and administrative expense to
decrease as a percentage of total revenues.

Restructuring.Restructuring expense was
$0.7 million for the year ended December 31, 2001.
This expense was the result of cost reduction measures
implemented in both July and November 2001 and consists of an
11% reduction in our overall workforce at that point in time and
the consolidation of certain functions. Restructuring expense
primarily consists of severance related expenses associated with
the reduction in

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OneSources overall workforce. As of
December 31, 2001, $136,000 remained unpaid and will be
paid out by mid-2002.


Amortization of Goodwill and Other Intangible
Assets.Amortization of goodwill and
other intangible assets expense was $1.5 million for the
years ended December 31, 2001 and, 2000. This expense is
the result of the acquisition of Corporate Technology
Information Services, Inc. in October 1999 and the associated
amortization of goodwill and other intangible assets acquired as
part of that transaction. In accordance with Statements of
Financial Accounting Standards (SFAS) No. 142,
Goodwill and Other Intangible Assets, OneSource will
cease amortization of goodwill as of January 1, 2002.

Interest Income, Net.Interest income, net of interest
expense, decreased to $853,000 for the year ended
December 31, 2001 from $887,000 for the year ended
December 31, 2000. This decrease is primarily the result of
lower rates on invested funds.

Other Income.Other
income decreased $2.0 million for the year ended
December 31, 2001 to zero. This decrease was the result of
the expiration of a software license agreement that terminated
on December 31, 2000 and was associated with the May 1998
sale of our CD-Insurance division.

Provision for Income Taxes.The provision for income taxes
increased to $1.9 million for the year ended
December 31, 2001 from $0.1 million for the year ended
December 31, 2000. The increase was due to pre-tax income
of $6.5 million at the applicable tax rates for the year ended
December 31, 2001 as compared to pre-tax income of
$0.9 million for the year ended December 31, 2000, the
greater utilization of net operating loss carryforwards during
the year ended December 31, 2000, and the effects of
varying tax rates in OneSources various tax jurisdictions.

Comparison of Results for The Years Ended
December 31, 2000 and 1999

Revenues.Total
revenues increased 46% to $51.9 million for the year ended
December 31, 2000 from $35.5 million for the year
ended December 31, 1999. On October 1, 1999, OneSource
acquired Corporate Technology Information Services, Inc.
Thereafter, revenues for the year ended December 31, 2000
and 1999 include $4.2 million and $1.0 million,
respectively, of revenues recognized from products and customers
related to the acquired Corporate Technology Information
Services, Inc. business. Excluding the Corporate Technology
Information Services, Inc. revenues, total revenues for the year
ended December 31, 2000 increased 38%.

Web-based product revenues increased 49% to
$47.3 million for the year ended December 31, 2000
from $31.8 million for the year ended December 31,
1999. The increase in Web-based product revenues was primarily
attributable to the addition of new customers, an increase in
the number of user seats subscribed to by existing customers,
and the sale of new product subscriptions to existing customers.
At the same time, CD Rom product and other revenues, which
consist of licensing royalties, printed directories, and mailing
lists, increased 24% to $4.6 million in 2000 from
$3.7 million in 1999, and were attributable to revenues
recognized from products related to the acquired Corporate
Technology Information Services, Inc. business. Excluding
revenues attributable to Corporate Technology Information
Services, Inc., CD Rom revenues decreased 86% to
$0.4 million for the year ended December 31, 2000 from
$2.7 million for the year ended December 31, 1999 as
OneSource completed its transition away from its legacy CD Rom
business.

Cost of Revenues.Total cost of revenues increased 21%
to $17.9 million for the year ended December 31, 2000
from $14.8 million for the year ended December 31,
1999. This increase was principally due to an increase in
royalty expense and additional infrastructure expense necessary
to support the growth in revenues. As a percentage of total
revenues, total cost of revenues decreased to 35% in 2000 from
42% in 1999. The decrease as a percentage of total revenues was
principally due to an increase in total revenues, a lower
effective royalty rate to information providers, and lower
production-related expenses.

Cost of Web-based product revenues increased 18%
to $15.5 million for the year ended December 31, 2000
from $13.1 million for the year ended December 31,
1999. This increase in cost of Web-based product revenues was
primarily due to an increase in royalty expense and additional
infrastructure expense necessary to support the growth in
revenues. As a percentage of Web-based product revenues, cost of
Web-based product revenues decreased to 33% in 2000 from 41% in
1999, and was principally due to an increase in Web-based
product revenues, a lower effective royalty rate to information
providers, and lower production-related expenses.

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Cost of CD Rom product and other revenues
increased 42% to $2.4 million for the year ended
December 31, 2000 from $1.7 million for the year ended
December 31, 1999. This increase in cost of CD Rom product
and other revenues was due to revenues recognized from products
related to the acquired Corporate Technology Information
Services, Inc. business. As a percentage of CD Rom product and
other revenues, cost of CD Rom product and other revenues
increased to 51% in 2000 from 45% in 1999, due to higher costs
associated with the maintenance and expansion of
OneSources proprietary database.

Selling and Marketing Expense.Selling and marketing expense
increased 55% to $20.5 million for the year ended
December 31, 2000 from $13.3 million for the year
ended December 31, 1999 principally due to increased
headcount and expenses incurred to hire and train new sales
personnel in connection with the OneSource Business Browser
product line. Selling and marketing expense increased as a
percentage of total revenues to 39% in 2000 from 37% in 1999.

Platform and Product Development Expense.Platform and product development
expense increased 11% to $8.8 million for the year ended
December 31, 2000 from $8.0 million for the year ended
December 31, 1999. The increase of platform and product
development expense was principally due to increased staffing
and associated personnel costs to meet new product demands. As a
percentage of total revenues, platform and product development
expense decreased from 23% to 17%. The decrease was due
principally to the growth in revenues and increased productivity.

General and Administrative Expense.General and administrative expense
decreased 7% to $5.1 million for the year ended
December 31, 2000 from $5.5 million for the year ended
December 31, 1999. The decrease of general and
administrative expense partially relates to one-time payments
incurred as part of our initial public offering in May 1999.
General and administrative expense decreased as a percentage of
total revenues to 10% in 2000 from 15% in 1999, primarily due to
one-time payments incurred as part of OneSources initial
public offering in May 1999.

Amortization of Goodwill and Other Intangible
Assets.Amortization of goodwill and
other intangible assets expense increased to $1.5 million
for the year ended December 31, 2000 from $0.4 million
for the year ended December 31, 1999. The increase of
amortization of goodwill and other intangible assets is the
result of the acquisition of Corporate Technology Information
Services, Inc. in October 1999 and reflects a full years
amortization of goodwill and other intangible assets acquired as
part of that transaction.

Interest Income, Net.Interest income, net of interest
expense, increased to $887,000 for the year ended
December 31, 2000 from $47,000 for the year ended
December 31, 1999. This increase in interest income, net of
interest expense, is primarily due to an increase in interest
income related to the invested cash balance from the initial
public offering proceeds and a reduction in interest expense
following the payoff of long-term debt in May 1999.

Other Income.Other
income was $2.0 million for both years ended December 31,
2000 and 1999, and was attributable to revenues generated from a
software license agreement entered into in connection with the
sale of OneSources CD-Insurance division.

Provision for Income Taxes.The provision for income taxes for the
year ended December 31, 2000 was $66,000 and related to
amounts due for state and franchise taxes. The provision for
income taxes for the year ended December 31, 1999 was
$133,000 and related to amounts due for state and franchise
taxes.

Quarterly Results of Operations
(Unaudited)

The following tables set forth a summary of
OneSources unaudited quarterly operating results for each
of the eight quarters in the two-year period ended
December 31, 2001. This information has been derived from
unaudited interim consolidated financial statements that, in the
opinion of management, have been prepared on a basis consistent
with the Consolidated Financial Statements appearing elsewhere
in this Annual Report on Form 10-K and include all
adjustments, consisting of only normal recurring adjustments,
necessary for a fair statement of such information when read in
conjunction with OneSources Consolidated Financial

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Statements and the Notes thereto. Our operating
results for any quarter are not necessarily indicative of
results for any future period.


|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |        |        |        |  
|------------------------------------------ | ----------------------------------------------------- | ------------------------------------- | --------------------------------------------------------------- | --------- | ------ | -------- | ------ | -------- | ------ | -------- | ------ | --------- | ------ | -------- | ------ | -------- | ------ | ----- | ------ | ------ | ------ | ----- | ------ | ------ | ------ | ----- | ------ | ------ | ------ | ----- | ------ | ------ | ------ | ------ | -
|                                           |                                                       |                                      
|                                           |                                                       | Quarter ended                        
|                                           |                                                       |                                      
|                                           |                                                       |                                       |                                                                 |          
|                                           |                                                       | 2001                                  |                                                                 | 2000     
|                                           |                                                       |                                       |                                                                 |          
|                                           |                                                       | Dec. 31,                              |                                                                 | Sept. 30, |        | June 30, |        | Mar. 31, |        | Dec. 31, |        | Sept. 30, |        | June 30, |        | Mar. 31,
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |         
|                                           |                                                       |                                      
|                                           |                                                       | (In thousands, except per share data)
|Statement of Operations Data:              |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Revenues:                                  |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           | Web-based product                                     |                                       | $                                                               | 14,210    |        |          | $      | 14,059   |        |          | $      | 14,323    |        |          | $      | 13,726   |        |       | $      | 12,997 |        |       | $      | 12,674 |        |       | $      | 11,535 |        |       | $      | 10,069 |       
|                                           | CD Rom product and other                              |                                       |                                                                 | 654       |        |          |        | 611      |        |          |        | 686       |        |          |        | 748      |        |       |        | 1,107  |        |       |        | 982    |        |       |        | 1,036  |        |       |        | 1,489  |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Total revenues                             |                                                       |                                       | 14,864                                                          |           |        |          | 14,670 |          |        |          | 15,009 |           |        |          | 14,474 |          |        |       | 14,104 |        |        |       | 13,656 |        |        |       | 12,571 |        |        |       | 11,558 |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Cost of revenues:                          |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           | Web-based product                                     |                                       |                                                                 | 4,166     |        |          |        | 4,123    |        |          |        | 4,129     |        |          |        | 4,013    |        |       |        | 4,051  |        |       |        | 3,977  |        |       |        | 3,547  |        |       |        | 3,961  |       
|                                           | CD Rom product and other                              |                                       |                                                                 | 372       |        |          |        | 469      |        |          |        | 607       |        |          |        | 617      |        |       |        | 564    |        |       |        | 563    |        |       |        | 706    |        |       |        | 540    |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Total cost of revenues                     |                                                       |                                       | 4,538                                                           |           |        |          | 4,592  |          |        |          | 4,736  |           |        |          | 4,630  |          |        |       | 4,615  |        |        |       | 4,540  |        |        |       | 4,253  |        |        |       | 4,501  |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Gross profit                               |                                                       |                                       | 10,326                                                          |           |        |          | 10,078 |          |        |          | 10,273 |           |        |          | 9,844  |          |        |       | 9,489  |        |        |       | 9,116  |        |        |       | 8,318  |        |        |       | 7,057  |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Operating expenses:                        |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           | Selling and marketing                                 |                                       |                                                                 | 3,925     |        |          |        | 4,143    |        |          |        | 5,105     |        |          |        | 5,274    |        |       |        | 5,110  |        |       |        | 5,472  |        |       |        | 5,328  |        |       |        | 4,609  |       
|                                           | Platform and product development                      |                                       |                                                                 | 2,201     |        |          |        | 2,080    |        |          |        | 2,022     |        |          |        | 2,057    |        |       |        | 2,279  |        |       |        | 2,113  |        |       |        | 2,099  |        |       |        | 2,351  |       
|                                           | General and administrative                            |                                       |                                                                 | 1,646     |        |          |        | 1,490    |        |          |        | 1,410     |        |          |        | 1,343    |        |       |        | 1,360  |        |       |        | 1,208  |        |       |        | 1,237  |        |       |        | 1,274  |       
|                                           | Restructuring                                         |                                       |                                                                 | 286       |        |          |        | 374      |        |          |        |          |        |          |        |         |        |       |        |       |        |       |        |       |        |       |        |       |        |       |        |       |       
|                                           | Amortization of goodwill and other intangible
	assets |                                       |                                                                 | 363       |        |          |        | 368      |        |          |        | 373       |        |          |        | 376      |        |       |        | 375    |        |       |        | 376    |        |       |        | 376    |        |       |        | 376    |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           |                                                       |                                       | Total operating expenses                                        |           |        | 8,421    |        |          |        | 8,455    |        |           |        | 8,910    |        |          |        | 9,050 |        |        |        | 9,124 |        |        |        | 9,169 |        |        |        | 9,040 |        |        |        | 8,610  |  
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           |                                                       |                                       | Income (loss) from operations                                   |           |        | 1,905    |        |          |        | 1,623    |        |           |        | 1,363    |        |          |        | 794   |        |        |        | 365   |        |        |        | (53   | )      |        |        | (722  | )      |        |        | (1,553 | )
|Interest income, net                       |                                                       |                                       | 180                                                             |           |        |          | 76     |          |        |          | 335    |           |        |          | 262    |          |        |       | 276    |        |        |       | 206    |        |        |       | 235    |        |        |       | 170    |       
|Other income                               |                                                       |                                       |                                                                |           |        |          |       |          |        |          |       |           |        |          |       |          |        |       | 500    |        |        |       | 500    |        |        |       | 500    |        |        |       | 500    |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           |                                                       |                                       | Income (loss) before provision for (benefit from)
	income taxes |           |        | 2,085    |        |          |        | 1,699    |        |           |        | 1,698    |        |          |        | 1,056 |        |        |        | 1,141 |        |        |        | 653   |        |        |        | 13    |        |        |        | (883   | )
|Provision for (benefit from) income taxes  |                                                       |                                       | 92                                                              |           |        |          | 681    |          |        |          | 684    |           |        |          | 425    |          |        |       | (11    | )      |        |       | 17     |        |        |       | 40     |        |        |       | 20     |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Net income (loss)                          |                                                       | $                                     | 1,993                                                           |           |        | $        | 1,018  |          |        | $        | 1,014  |           |        | $        | 631    |          |        | $     | 1,152  |        |        | $     | 636    |        |        | $     | (27    | )      |        | $     | (903   | )     
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Basic earnings (loss) per share            |                                                       | $                                     | 0.16                                                            |           |        | $        | 0.08   |          |        | $        | 0.08   |           |        | $        | 0.05   |          |        | $     | 0.10   |        |        | $     | 0.05   |        |        | $     | 0.00   |        |        | $     | (0.08  | )     
|Diluted earnings (loss) per share          |                                                       | $                                     | 0.15                                                            |           |        | $        | 0.07   |          |        | $        | 0.07   |           |        | $        | 0.05   |          |        | $     | 0.08   |        |        | $     | 0.05   |        |        | $     | 0.00   |        |        | $     | (0.08  | )     
|Weighted average common shares outstanding |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           |                                                       | Basic                                 |                                                                 |           | 12,158 |          |        |          | 12,547 |          |        |           | 12,653 |          |        |          | 12,338 |       |        |        | 11,975 |       |        |        | 11,664 |       |        |        | 11,526 |       |        |        | 10,862 |       
|                                           |                                                       | Diluted                               |                                                                 |           | 13,112 |          |        |          | 13,604 |          |        |           | 13,682 |          |        |          | 13,631 |       |        |        | 13,669 |       |        |        | 13,734 |       |        |        | 11,526 |       |        |        | 10,862 |       
|                                           |                                                       | (Percentage of total revenues)       
|Revenues:                                  |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           | Web-based product                                     |                                       |                                                                 | 96        | %      |          |        | 96       | %      |          |        | 95        | %      |          |        | 95       | %      |       |        | 92     | %      |       |        | 93     | %      |       |        | 92     | %      |       |        | 87     | %     
|                                           | CD Rom product and other                              |                                       |                                                                 | 4         |        |          |        | 4        |        |          |        | 5         |        |          |        | 5        |        |       |        | 8      |        |       |        | 7      |        |       |        | 8      |        |       |        | 13     |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Total revenues                             |                                                       |                                       | 100                                                             |           |        |          | 100    |          |        |          | 100    |           |        |          | 100    |          |        |       | 100    |        |        |       | 100    |        |        |       | 100    |        |        |       | 100    |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Cost of revenues:                          |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           | Web-based product                                     |                                       |                                                                 | 28        |        |          |        | 28       |        |          |        | 28        |        |          |        | 28       |        |       |        | 29     |        |       |        | 29     |        |       |        | 28     |        |       |        | 34     |       
|                                           | CD Rom product and other                              |                                       |                                                                 | 3         |        |          |        | 3        |        |          |        | 4         |        |          |        | 4        |        |       |        | 4      |        |       |        | 4      |        |       |        | 6      |        |       |        | 5      |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Total cost of revenues                     |                                                       |                                       | 31                                                              |           |        |          | 31     |          |        |          | 32     |           |        |          | 32     |          |        |       | 33     |        |        |       | 33     |        |        |       | 34     |        |        |       | 39     |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Gross profit                               |                                                       |                                       | 69                                                              |           |        |          | 69     |          |        |          | 68     |           |        |          | 68     |          |        |       | 67     |        |        |       | 67     |        |        |       | 66     |        |        |       | 61     |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Operating expenses:                        |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           | Selling and marketing                                 |                                       |                                                                 | 26        |        |          |        | 28       |        |          |        | 34        |        |          |        | 37       |        |       |        | 36     |        |       |        | 40     |        |       |        | 42     |        |       |        | 40     |       
|                                           | Platform and product development                      |                                       |                                                                 | 15        |        |          |        | 14       |        |          |        | 14        |        |          |        | 14       |        |       |        | 16     |        |       |        | 15     |        |       |        | 17     |        |       |        | 20     |       
|                                           | General and administrative                            |                                       |                                                                 | 11        |        |          |        | 10       |        |          |        | 9         |        |          |        | 9        |        |       |        | 10     |        |       |        | 9      |        |       |        | 10     |        |       |        | 11     |       
|                                           | Restructuring                                         |                                       |                                                                 | 2         |        |          |        | 3        |        |          |        |          |        |          |        |         |        |       |        |       |        |       |        |       |        |       |        |       |        |       |        |       |       
|                                           | Amortization of goodwill and other intangible
	assets |                                       |                                                                 | 2         |        |          |        | 3        |        |          |        | 2         |        |          |        | 3        |        |       |        | 3      |        |       |        | 3      |        |       |        | 3      |        |       |        | 3      |       
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           |                                                       |                                       | Total operating expenses                                        |           |        | 56       |        |          |        | 58       |        |           |        | 59       |        |          |        | 63    |        |        |        | 65    |        |        |        | 67    |        |        |        | 72    |        |        |        | 74     |  
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Income (loss) from operations              |                                                       |                                       | 13                                                              | %         |        |          | 11     | %        |        |          | 9      | %         |        |          | 5      | %        |        |       | 2      | %      |        |       |       | %      |        |       | (6     | )%     |        |       | (13    | )%    
|                                           |                                                       |                                       |                                                                 |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       

Annualized Contract Value

One measure of the performance of our business is
annualized contract value. This is a measurement
OneSource uses for normalized period-to-period comparisons to
indicate business volume and growth, both in terms of new
customers and upgrades and expansions at existing customers.
OneSources presentation and calculation of annualized
contract value may not be comparable to similarly titled
measures used by other

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companies. It is not an absolute indicator, and
OneSource cannot guarantee that any annualized contract value
will be ultimately realized as revenues.


OneSource uses annualized contract value as a
measure of its business because it shows the growth or decline
in OneSources customer base in a way that revenues cannot.
Since OneSources business is primarily subscription-based,
revenues are recognized not when a sale is made, but in ratable
portions over the term of the subscription (which is usually
twelve months). As a result, from a revenue viewpoint the
addition or loss of even a major customer contract may not have
a dramatic impact on a quarter-to-quarter basis. On the other
hand, by looking at the value of customer contracts in hand at
the end of each quarter, OneSource can more readily see trends
in its business. For example, the addition of a one-year
subscription contract with total payments of $1.0 million
may only increase revenues by approximately $250,000
($1.0 million divided by four) in the quarter in which the
sale is made, but would increase annualized contract value by
$1.0 million. Similarly, if the customer did not renew that
contract, revenues in the next quarter would only decrease by
$250,000, while annualized contract value would decrease by
$1.0 million.

In calculating annualized contract value,
OneSource factors only those contracts for which the customer
has actually been invoiced. Since amounts invoiced are included
in deferred revenues on OneSources balance sheet for all
customer contracts with terms extending beyond the month of
invoice, this demonstrates that annualized contract value is
based on actual customer contracts reflected in OneSources
historical financial statements. To compute annualized contract
value, one multiplies by twelve the amount of total invoiced
fees for one month that are included in deferred revenues.
Annualized contract value is not intended to be an absolute
indicator of future revenues. OneSource only annualizes
existing, invoiced contracts, but does so without regard to the
remaining term of those contracts. Most of OneSources
contracts are for 12 months, but as of the date that
OneSource calculates annualized contract value, the remaining
term of nearly all of OneSources contracts will be less
than 12 months. If a customer fails to pay its invoiced
fees or terminates the contract or if OneSource is unable to
renew a contract, its revenues in subsequent periods may be less
than expected if based solely on annualized contract value.
Conversely, if OneSource adds additional customers or renews
existing contracts at higher rates, its revenues in future
periods may exceed expectations if based solely on annualized
contract value.

The calculation of annualized contract value for
OneSources Web-based products is illustrated below:

|                  |  |           |        |                |  |                |         |  |  |   |        | 
|----------------- |  | --------- | ------ | -------------- |  | -------------- | ------- |  |  | - | ------ | 
|                  |  |           |        | One Month of   |  |               
|                  |  | Web-Based |        | Invoiced Fees  |  |               
|                  |  | Deferred  |        | in Deferred    |  | Annualized    
|Measurement Date  |  | Revenues  |        | Revenues       |  | Contract Value
|                  |  |           |        |                |  |               
|                  |  |           |        | (In thousands) |  |               
|December 31, 2000 |  | $         | 28,528 |                |  | $              | 4,862.8 |  |  | $ | 58,354 | 
|December 31, 2001 |  |           | 26,760 |                |  |                | 4,673.1 |  |  |   | 56,077 | 

The aggregate annualized contract value for
Web-based products was $56.1 million as of
December 31, 2001, compared to $58.3 million as of
December 31, 2000, representing a decrease in annualized
contract value of 4%. Of this $56.1 million,
$45.4 million was attributable to those customers that were
under contract as of both December 31, 2000 and 2001. The
renewal rate for subscribers of the Business Browser product
line as of December 31, 2001 was 68% calculated on a dollar
basis, whereas the renewal rate for those subscribers that also
use the AppLink application programming interface tool as of
December 31, 2001 was 85% calculated on a dollar basis.

The number of Web-based customers decreased 6% to
817 at December 31, 2001 from 869 at December 31,
2000. On average, OneSources customers for Web-based
products as of December 31, 2001 had an annualized contract
value of $68,700 per customer, compared to an average annualized
contract value of $67,200 per customer as of December 31,
2000, which represents a 2% increase. OneSource believes this
growth in average annualized contract value was attributable to
an increase in the number of user licenses purchased by
individual customers and the addition of new products subscribed
to by individual customers.

As of December 31, 2001, 42 organizations
subscribed to the AppLink application programming interface
toolkit. Such customers as of December 31, 2001 generated,
on average, approximately $380,000 each in annualized contract
value.

Liquidity and Capital Resources

Since acquiring the business from Lotus
Development Corporation in 1993, OneSource has funded operations
through a combination of seller financing, proceeds received
from the sale of Class P common stock

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and common stock in connection with the purchase
of the business from Lotus Development Corporation, bank debt,
proceeds received from the sale of non-strategic lines of
business, capitalized equipment leases, cash flows from
operations, and our initial public offering which closed in May
1999.


Cash and cash equivalents totaled
$18.2 million at December 31, 2001, compared to
$17.3 million at December 31, 2000. The increase is
primarily due to funds provided by operating activities of
$9.4 million, partially offset by net cash used in
investing activities of $2.6 million and in financing
activities of $6.1 million.

Net cash provided by operating activities was
$9.4 million for the year ended December 31, 2001,
compared to $6.6 million for the year ended December 31,
2000. The net change of $2.8 million period to period is
the result of increased net income of $4.7 million in 2001
compared to net income of $0.9 million in 2000, partially offset
by changes in assets and liabilities.

Net cash used in investing activities was
$2.6 million for the year ended December 31, 2001,
compared to $4.4 million for the year ended
December 31, 2000. Net cash used in investing activities
was primarily from purchases of property and equipment for
$1.8 million during the year ended December 31, 2001
and $4.0 million during the year ended December 31,
2000, as well as $0.8 million for capitalized software
development costs for the year ended December 31, 2001 as
compared to $0.5 million for the year ended
December 31, 2000.

Net cash used in financing activities was
$6.1 million for the year ended December 31, 2001,
compared to net cash provided by financing activities of
$1.6 million for the year ended December 31, 2000. Net
cash used in financing activities in 2001 primarily consisted of
the repurchase of common stock of $8.1 million, offset in
part by net proceeds from the sale of common stock under our
various stock option and employee stock purchase plans. Net cash
provided by financing activities in 2000 primarily consisted of
net proceeds from the sale of common stock under various stock
option and employee stock purchase plans, offset in part by
repayments of capital lease obligations.

OneSource does not currently have a line of
credit but intends to enter into a revolving line of credit for
letters of credit, equipment financing, and general working
capital.

OneSource believes that its current cash and cash
equivalents and funds anticipated to be generated from
operations, will be sufficient to satisfy working capital and
capital expenditure requirements for at least the next twelve
months.

In April 2001, OneSource announced a stock
buyback program to repurchase up to 1,000,000 shares of its
common stock over the next twelve months, at such times when
OneSource deems such purchases to be an effective use of cash.
Under the stock repurchase program, shares may be repurchased
from time-to-time, at managements discretion, at
prevailing prices in the open market. As of December 31,
2001, OneSource had repurchased 960,600 shares of its common
stock at an average price of $8.43 per share. OneSource intends
to leverage its existing cash and cash equivalents balances to
execute the repurchases.

In January 2002, OneSource announced a
second stock buyback program to repurchase up to an additional
$5.0 million of its common stock over the next twelve
months.

Contractual Obligations and
Commitments

The following table presents OneSources
contractual obligations and commercial commitments as of
December 31, 2001 over the next five years.

|                  |  |                        |       |      |  |      |       |      |  |      |     |       |  |   |     |  |  |   |     |  |  |   |        | 
|----------------- |  | ---------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | --- | ----- |  | - | --- |  |  | - | --- |  |  | - | ------ | 
|                  |  |                       
|                  |  | Payments due by period
|                  |  |                       
|                  |  | 2002                   |       | 2003 |  | 2004 |       | 2005 |  | 2006 |     | Total
|                  |  |                        |       |      |  |      |       |      |  |      |     |      
|                  |  |                       
|                  |  | (In thousands)        
|Operating leases  |  | $                      | 1,096 |      |  | $    | 952   |      |  | $    | 622 |       |  | $ | 202 |  |  | $ | 155 |  |  | $ | 3,027  | 
|Royalty contracts |  |                        | 5,362 |      |  |      | 2,216 |      |  |      | 55  |       |  |   |    |  |  |   |    |  |  |   | 7,633  | 
|                  |  |                        |       |      |  |      |       |      |  |      |     |       |  |   |     |  |  |   |     |  |  |   |        | 
|                  |  | $                      | 6,458 |      |  | $    | 3,168 |      |  | $    | 677 |       |  | $ | 202 |  |  | $ | 155 |  |  | $ | 10,660 | 
|                  |  |                        |       |      |  |      |       |      |  |      |     |       |  |   |     |  |  |   |     |  |  |   |        | 

Recently Issued Accounting
Pronouncements

In July 2001, the Financial Accounting Standards
Board (FASB) issued Statements of Financial
Accounting Standards (SFAS) No. 141,
Business Combinations, and SFAS No. 142,
Goodwill and Other Intangible Assets. SFAS
No. 141 requires use of the purchase method of accounting
for business

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combinations initiated after June 30, 2001
and eliminated the pooling-of-interests method. SFAS
No. 142 is effective for OneSource on January 1, 2002 and
requires, among other things, the discontinuance of goodwill
amortization. In addition, the standard includes provisions for
the reclassification of certain existing recognized intangible
assets into goodwill, the reassessment of the useful lives of
existing recognized intangible assets, the reclassification of
certain intangible assets out of previously reported goodwill
and the identification of reporting units for purposes of
assessing potential future impairments of goodwill. SFAS
No. 142 requires goodwill to be tested for impairment under
certain circumstances, and written off when impaired, rather
than being amortized as previous standards required. OneSource
is currently assessing the impact of SFAS No. 142 on its
financial position and results of operations. OneSources
amortization of goodwill was $1.0 million in the year ended
December 31, 2001. Goodwill, net of accumulated
depreciation, was $5.0 million at December 31, 2001.


In June 2001, the FASB issued SFAS No.143,
Accounting for Asset Retirement Obligations, which
is effective January 1, 2003. SFAS No.143 addresses the
financial accounting and reporting for obligations and
retirement costs related to the retirement of tangible
long-lived assets. OneSource does not expect that the adoption
of SFAS No.143 will have a significant impact on its financial
position and results of operations.

In August 2001, the FASB issued SFAS No.144,
Accounting for the Impairment or Disposal of Long-Lived
Assets, which is effective January 1, 2002. SFAS
No.144 supersedes SFAS No.121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of, and the accounting and reporting provisions
relating to the disposal of a segment of a business of
Accounting Principles Board Opinion No. 30. OneSource does
not expect that the adoption of SFAS No.144 will have a
significant impact on its financial position and results of
operations.

Certain Factors that May Affect Future
Results

This Annual Report on Form 10-K contains
forward-looking statements that involve risks and uncertainties.
OneSources actual results could differ materially from
those anticipated in these forward-looking statements as a
result of certain factors, including without limitation, those
set forth in the following risk factors and elsewhere in this
Annual Report on Form 10-K. In addition to the other
information included or incorporated by reference in this Annual
Report on Form 10-K, the following risk factors should be
considered carefully in evaluating OneSource and its business:

WE HAVE A CUMULATIVE DEFICIT AND EXPECT TO
CONTINUE TO HAVE A CUMULATIVE DEFICIT FOR THE FORESEEABLE
FUTURE. We incurred losses from operations of approximately
$1.6 million in 1996, $1.4 million in 1997,
$5.0 million in 1998, $6.4 million in 1999, and
$2.0 million in 2000, and had net income from operations of
$5.7 million in 2001. As of December 31, 2001, we had
an accumulated deficit of $9.4 million.

WE RELY ON GENERATING SUBSCRIPTION REVENUES FROM
OUR BUSINESS BROWSER PRODUCT LINE, AND WE MAY NOT SUSTAIN OR
INCREASE PROFITS UNLESS DEMAND FOR OUR BUSINESS BROWSER PRODUCTS
CONTINUES TO GROW. Subscription revenues from our Business
Browser product line accounted for 95% of total revenues in
2001, 91% of total revenues in 2000, 90% of total revenues in
1999, 53% of total revenues in 1998, and 11% of total revenues
in 1997. At the end of 2000, we phased out our legacy CD Rom
products that were not part of the Business Browser product
line. As a result, our future financial condition may depend
heavily on the success or failure of our Business Browser
product line. Business Browser products were introduced in
December 1996, and it is difficult to predict demand and market
acceptance for these products in the new and rapidly evolving
Web-based business information services market. If the demand
for Business Browser products does not continue to grow, whether
due to, among other factors, increased competition, lack of
market acceptance, insufficient enhancements, failure of
Internet or Web use to grow in general, or technological change,
we may not be able to sustain or increase profits.

OUR SALES EFFORTS TO OUR TARGET MARKET MAY BE
LENGTHY, INVOLVE DELAYS, OR INVOLVE UNCERTAINTY, ALL OF WHICH
MAY ADVERSELY IMPACT OUR RESULTS OF OPERATIONS. Selling our
products to our target market, Global 5000 business-to-business
companies, involves sales cycles that we believe are potentially
longer and more uncertain than those involving small-size
organizations. Our customers generally commit significant time
and resources to evaluate our products, and they often require
us to expend substantial time, effort, and money to educate them
about our products and solutions. In addition, these sales
efforts often require final approval from our customers
senior level management, potentially resulting in delays to the
sales cycle. All of these factors may extend the sales

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cycle and increase the uncertainty of whether a
sale will actually be completed. The timing and uncertainty of
sales and the length of the sales cycle may cause our results of
operations to vary significantly from quarter to quarter and may
have a material adverse impact on our results of operations.


ANNUALIZED CONTRACT VALUE MAY NOT BE AN ACCURATE
INDICATION OF OUR PERFORMANCE. We use annualized contract
value as a measurement for normalized period-to-period
comparisons to indicate business volume and growth. Our
presentation and calculation of annualized contract value may
not be comparable to similarly titled measures used by other
companies. It is not an absolute indicator, and we cannot
guarantee that any annualized contract value will be ultimately
realized as revenues.

COMPETITION IN OUR INDUSTRY IS INTENSE AND MANY
OF OUR COMPETITORS HAVE GREATER RESOURCES THAN WE DO; THIS
COMPETITION MAY ADVERSELY AFFECT OUR FINANCIAL RESULTS. The
business information services industry is intensely competitive.
Several of our information providers compete against each other
and in some cases with us. We face direct or indirect
competition from numerous companies including the following:



| |   |                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | large, well-established business and financial
	information providers such as Dow Jones & Co., Pearson PLC,
	Reuters Group PLC, and McGraw-Hill Companies Inc.;                                             
|
| |  | aggregators of business and financial
	information, such as LexisNexis, The Dialog Corporation,
	Factiva, NewsEdge Corporation, and Bureau Van Dijk Computer
	Services SA;                                  
|
| |  | providers of company information, such as
	Disclosure Incorporated, Market Guide Inc. (a Multex.com
	subsidiary), Hemscott Group Ltd., and Hoovers, Inc.;                                                   
|
| |  | providers of sales, marketing, and credit
	information such as Dun & Bradstreet Corp., InfoUSA Inc.,
	and Siebel Systems, Inc.; and                                                                         
|
| |  | Web retrieval, Web portal companies,
	and other free or low-cost mass market on-line services, such as
	TerraNetworks, S.A., Yahoo! Inc., AOL-Time Warner, Inc.,
	MarketWatch.com, and TheStreet.com, Inc.

Based on reported operating results, industry
reports and other publicly available information, we believe
that many of our existing competitors, as well as a number of
prospective competitors, have longer operating histories,
greater name recognition, larger customer bases, and
significantly greater financial, technical and marketing
resources than we possess. As a result, they may be able to
respond more quickly to new or emerging technologies and changes
in user requirements, or to devote greater resources to the
research, development, promotion, and sale of their products
than we can. These competitors may be able to undertake more
extensive marketing campaigns, adopt more aggressive pricing
policies, and make more attractive offers to potential
employees, customers, and information providers. Our competitors
also may develop products that are equal or superior to our
products or that achieve greater market acceptance than our
products. Ultimately, we may lose customers to competitors if we
are not able to respond to requests for additional features and
new products in a timely fashion. Nonetheless, increased
competition may result in price reductions, reduced margins, or
loss of market share, any of which may materially adversely
affect our business, operating results, and financial condition.

OUR FAILURE TO INCREASE THE NUMBER OF OUR
SUBSCRIBERS OR RETAIN OUR CURRENT SUBSCRIBER BASE MAY ADVERSELY
AFFECT OUR BUSINESS. Our future success remains highly dependent
on attracting organizations that are financially able to and
willing to allocate funds to subscribe to on-line business
information services. If the market for subscription-based
on-line business information services develops more slowly than
we may anticipate, or if our efforts to retain existing
subscribers or attract new subscribers are not successful or
cost-effective, our operating results and financial condition
may be materially and adversely affected.

IF A SIGNIFICANT NUMBER OF OUR CUSTOMERS
EXPERIENCE A DECLINE IN THEIR FINANCIAL CONDITION, THE
COLLECTABILITY OF OUR ACCOUNTS RECEIVABLE MAY SUFFER, AND MAY
MATERIALLY ADVERSELY AFFECT OUR FINANCIAL RESULTS. A decline in
the financial condition of additional customers owing
significant amounts to us may cause us to write off the amounts
owed by these customers as bad debt, and/or a revenue reduction,
either of which may have a material adverse effect on our
financial results.

EXPANSION INTO INTERNATIONAL MARKETS WHERE WE
HAVE LIMITED PRIOR EXPERIENCE MAY CAUSE MATERIAL AND ADVERSE
EFFECTS ON OUR BUSINESS. We

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presently have offices primarily in the US and in
the United Kingdom, but look to expand our business
opportunities into new markets. Expanding into diverse
international markets exposes us to certain risks of conducting
business that include, but are not limited to, the following:
potential higher costs, unanticipated regulatory changes,
political instability, difficulties in staffing and managing
operations, adverse tax consequences, currency and exchange rate
fluctuations, and seasonal reductions in business activity. In
addition, the impact of language and other cultural differences
could result in product and service offerings that may not
satisfy the needs of our customers and may not be profitable.
Further, strategic relationships may be necessary to facilitate
expansion into certain markets, and our business may be
adversely affected if we misallocate our resources and
ultimately fail to gain new or effective alliances in these
areas. Moreover, possible nationalization, expropriation, and
limits and unique laws pertaining to the collection and
provision of certain types of information on individuals (e.g.,
the Data Protection Act) may hinder operations in international
markets, and may cause material and adverse effects on our
business.


GENERAL ECONOMIC AND GEOPOLITICAL CONDITIONS MAY
NEGATIVELY AFFECT OUR OPERATING RESULTS AND FINANCIAL CONDITION.
An ongoing economic downturn and uncertain geopolitical
environment may cause organizations to delay or forego entirely
investments in value-added business information products such as
the Business Browser product line and AppLink application
programming interface toolkit. We have experienced these effects
in the last year as a result of the recent economic slowdown and
the tragic events occurring on September 11, 2001. A
prolonged recession and geopolitical crisis may cause
organizations that comprise our target market to significantly
reduce discretionary spending with business information
providers and create a greater risk of business failure among
existing subscribers. These effects may have a material adverse
effect on our operating results and financial condition.

IF OUR INFORMATION PROVIDERS PROVIDE US WITH
INACCURATE OR UNRELIABLE DATA, FAIL TO TRANSMIT THEIR DATA
FEEDS, CEASE DOING BUSINESS WITH US, OR REQUIRE US TO
SIGNIFICANTLY INCREASE OUR ROYALTY OBLIGATIONS, THIS MAY HAVE AN
ADVERSE EFFECT ON OUR BUSINESS, AND FUTURE SALES OF THE BUSINESS
BROWSER PRODUCT MAY BE JEOPARDIZED. We do not own or create all
of the original content distributed through our products. We
depend significantly on information providers to supply accurate
and reliable information and data feeds to us on a timely basis.
Our products may experience interruptions (and potentially may
be compromised) due to any failure, delay, or cut-off in the
transmission or receipt of this information, or a requirement by
our information providers that royalty payments be significantly
increased. In addition, our products may be negatively affected
if our information providers provide us with faulty or erroneous
data that becomes integrated into our products. We may then have
to seek alternatives to the information providers
information and data feeds, and, in some cases, it is possible
that reasonable alternatives may not exist without resorting to
multiple sources, or may not be provided in a timely manner.
This may result in increased costs or reduced functionality of
our products and may have a material and adverse effect on our
business, operating results, and financial condition.

IF OUR THIRD PARTY HOSTING FACILITY SUFFERED A
DISASTER, IT MAY BE COSTLY TO CORRECT, AND OUR BUSINESS MAY
SUFFER SIGNIFICANT LOSSES. Our third party hosting facility may
suffer a disaster relating to the facility, its power supplies,
or telecommunications transports. Defects, errors, or a disaster
at our third party hosting facility also may result in
significant downtime, and our business may suffer significantly
from potential adverse customer reaction, litigation, negative
publicity, loss of revenues, and harm to our reputation.

IF OUR SOFTWARE OR HARDWARE BECOMES DEFECTIVE, OR
IF OUR SOFTWARE, HARDWARE, OR WEB SITE BECOMES THE TARGET OF
INTENTIONAL DISRUPTIONS, DIRECTLY OR INDIRECTLY, OUR PRODUCTS
MAY BE NEGATIVELY IMPACTED, AND OUR REPUTATION AND FUTURE SALES
MAY BE HARMED IF THESE EFFORTS ARE SUCCESSFUL. Complex software
like the software we develop and use and the hardware we use for
our products may contain or develop errors or defects,
especially when first implemented, that may be very difficult
and costly to correct. In addition, our software, hardware, or
Web site may become the target of intentional disruptions,
directly or indirectly, including software viruses and malicious
code specifically designed to impede the performance of our
products; such software viruses and malicious code may avoid
detection by our anti-virus software in place. Similarly,
experienced computer programmers or hackers may attempt to
penetrate our network security or the security of our Web site
and misappropriate proprietary information or cause
interruptions to the delivery of our products. As a result, our
activities may be substantially disrupted, and our reputation,
future sales, operating results, and financial condition may be
adversely affected if these efforts are successful.

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WE MAY HAVE DIFFICULTY IDENTIFYING AND COMPETING
FOR ACQUISITION OPPORTUNITIES. Our business strategy includes
the pursuit of strategic acquisitions. From time to time we may
engage in discussions with third parties concerning potential
acquisitions of niche expertise, business, and/or proprietary
rights. In executing our acquisition strategy, we may be unable
to identify suitable companies as acquisition candidates. In
addition, if we pursue an acquisition and are unable to identify
a suitable acquisition candidate, management may potentially
spend a significant amount of time, energy, and resources that
may adversely affect our operating results and financial
condition.

PURSUING AND COMPLETING POTENTIAL ACQUISITIONS
MAY DIVERT MANAGEMENT ATTENTION AND FINANCIAL RESOURCES AND MAY
NOT PRODUCE THE DESIRED BUSINESS RESULTS. If we pursue and
complete any potential acquisition(s), our management team may
spend a significant amount of time and management and financial
resources in the acquisition process and to integrate the
acquired business with our existing business. To pay for
acquisition(s), we may use capital stock, cash, or a combination
of both. Alternatively, we may borrow money from a bank or other
lender. If we use cash or debt financing, our financial
liquidity will be reduced. In addition, from an accounting
perspective, the potential acquisition(s) may involve
nonrecurring charges or involve amortization of significant
amounts of goodwill that may adversely affect our results of
operations.

Despite the investment of these management and
financial resources and completion of due diligence with respect
to these efforts, the potential acquisition(s) may not produce
the revenues, earnings or business synergies that we may
anticipate, and the acquired technology or proprietary right(s)
may not perform as expected for a variety of reasons, including
the following:



| |   |                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------
| |  | difficulty in the assimilation of the operations,
	technologies, rights, products, and personnel of the acquired
	business(es);
|
| |  | risks of entering markets in which we have no or
	limited prior experience;                                                    
|
| |  | inability to maintain the key business
	relationships and the reputations of acquired business(es);                            
|
| |  | potential dilution to current shareholders from
	the issuance of additional equity securities;                                 
|
| |  | expenses of any undisclosed or potential legal
	liabilities of the acquired business(es); and                                  
|
| |  | the potential loss of key employees of the
	acquired business(es).                                                             

WE MAY EXPERIENCE SIGNIFICANT FLUCTUATIONS IN OUR
QUARTERLY RESULTS, WHICH MAY MAKE IT DIFFICULT FOR INVESTORS TO
PERFORM RELIABLE PERIOD-TO-PERIOD COMPARISONS, AND CONTRIBUTE TO
VOLATILITY IN THE MARKET PRICE FOR OUR COMMON STOCK, THUS
POTENTIALLY REDUCING INVESTMENT IN OUR STOCK. Our quarterly
revenues, gross profits, and results of operations may fluctuate
in the future. In addition, we believe that an important measure
of our business is the annualized contract value at the end of
each period, which also may fluctuate. Causes of such
fluctuations have included and may include, among other factors,
as follows:



| |   |                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------
| |  | changes in demand for our products and services;                                                           
|
| |  | the size, value and timing of both new and
	renewal subscriptions with our corporate customers;            
|
| |  | the cost and renewal status of contracts with our
	content providers;                                      
|
| |  | competition (particularly price, product and
	service competition);                                        
|
| |  | increases in selling and marketing expenses, as
	well as other operating expenses;                         
|
| |  | technical difficulties or system downtime
	affecting our products or the Web generally;                    
|
| |  | overall performance of our products, services,
	and technology;                                            
|
| |  | our ability to develop, market, and introduce new
	and enhanced versions of our products on a timely basis;
|
| |  | economic conditions specific to the Web, as well
	as general economic and political conditions; and        
|
| |  | consolidation of our customers.                                                                            

Further, a substantial portion of our expenses,
including most product and platform development and selling and
marketing expenses, must be incurred in advance of revenue
generation. If we are unable to expand

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our sales and marketing efforts and our projected
revenues do not meet our expectations, then we are likely to
experience an even larger shortfall in our operating profit
(loss) relative to our expectations. Moreover, although we
are not presently a party to a lawsuit, any potential claims,
even if not meritorious, against us may result in the
expenditure of significant financial and managerial resources on
our part, which may contribute to a decrease in investment of
our stock and may materially impact our results of operations by
potentially subjecting us to significant liabilities and by
diverting managements attention and resources.


WE MAY BE SUBJECT TO POTENTIAL LITIGATION BY ANY
THIRD PARTY CONCERNING THE INFRINGEMENT OF ANY PROPRIETARY
RIGHT, AND SUCH LITIGATION MAY BE COSTLY AND TIME CONSUMING. IN
ADDITION, WE MAY HAVE TO INCUR LEGAL EXPENSES TO PROTECT OUR
INTELLECTUAL PROPERTY RIGHTS. There has been substantial
litigation in the information services industry involving
intellectual property rights. Although we believe that we have
not infringed, and are not infringing, the intellectual property
of others through our Business Browser product line, AppLink
application programming interface toolkit, and CD Rom product,
if such claims were to be asserted, with or without merit, they
may have a material adverse effect on our business, results of
operations, and financial condition. In addition, to the extent
that we license from third parties informational content that is
included in our Business Browser product line, our potential
exposure to copyright infringement actions may increase because
we must rely upon warranties and representations by such
information providers as to the origin and ownership of content
that we are subsequently licensing to users of our Business
Browser products; such warranties and representations that may
be inaccurate or inadequate. In addition, although we generally
obtain indemnification provisions in our agreements with
information providers, indemnification may not be adequate
compensation for breach of such warranties and representations.
In the event of a successful claim against us, we may be
required to pay significant monetary damages if we are held to
have willfully infringed a patent, copyright, trade secret, or
other proprietary right; discontinue use or sale of the
infringing products or information; expend significant resources
to develop non-infringing technology; and/or enter into royalty
and licensing agreements that may not be offered on acceptable
terms. If a successful claim is filed against us and we fail to
commercially develop or license a substitute technology, our
business may be materially harmed.

In the future, litigation may be necessary to
defend, enforce, and/or protect our own intellectual property,
including our copyrights, patents, trademarks, and other
proprietary information. The protective steps we have taken and
continue to take may be inadequate to deter misappropriations of
our intellectual property rights, and we may be unable to detect
the unauthorized use of, or take appropriate steps to enforce,
our intellectual property rights.

Any litigation involving intellectual property
rights may be costly and time consuming, and divert
managements attention, either of which may have a material
adverse effect on our business, results of operations, and
financial condition. Adverse determinations in this litigation
may result in the loss of our proprietary rights, subject us to
significant liabilities, require us to seek licenses from
additional third parties, cause our customers to prematurely
cancel their subscriptions to our products, and prevent us from
selling our products; any one of these results may have a
material adverse effect on our business, results of operations,
and financial condition. Additionally, our general liability
insurance may not cover any of these claims or may not be
adequate to protect us against all liability that may be
imposed. Further, effective protection of intellectual property
rights is limited or unavailable in certain foreign countries,
thus making the possibility of misappropriation of our
intellectual property more likely. Policing unauthorized use of
our products is difficult, expensive, and time consuming, and
the unique technology of the Internet may provide new methods
for illegal copying and distribution. Accordingly, we cannot be
certain that we may be able to protect our intellectual property
rights against unauthorized third party copying, distribution,
or use. This may materially and adversely affect our competitive
position.

IF WE LOSE KEY PERSONNEL AND ARE UNABLE TO
ATTRACT ADDITIONAL AND RETAIN EXISTING KEY PERSONNEL, IT MAY
CAUSE A MATERIAL AND ADVERSE EFFECT ON OUR BUSINESS. We expect
that our future success will depend, in substantial part, on the
continued services of our senior management, including
Daniel J. Schimmel, our President and Chief Executive
Officer; William G. Schumacher, our Senior Vice President,
Content Development; Philip J. Garlick, our Senior Vice
President, Global Sales; Roy D. Landon, our Senior Vice
President and Chief Financial Officer; Michael Buzzell, our
Senior Vice President, Engineering; and Mary F. McCabe, our
Senior Vice President, Product Development. None of our senior
management has entered into employment agreements with us, and
we do not maintain key-person life insurance on any of our
employees. The loss of the services of one or a group of our key
personnel may have a material, adverse effect on development of
new

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products and services, our ability to manage the
business, and our financial condition. In addition, we expect
that our future success will depend on our continuing ability to
attract, retain, and motivate highly qualified technical,
customer support, sales, financial, accounting, and managerial
personnel. Competition for such key personnel is intense, and we
cannot assure that we will be able to retain such personnel or
that we will be able to attract, assimilate, or retain other
highly qualified personnel in the future. Moreover, competition
for highly qualified key personnel may lead to increased
recruitment and retention costs, thus potentially hindering our
financial condition.


THE FUTURE SALES OF OUR COMMON STOCK MAY
NEGATIVELY AFFECT OUR STOCK PRICE, WHICH MAY CAUSE DIFFICULTIES
IN THE FUTURE TO SELL EQUITY. If our stockholders decide to sell
substantial amounts of our common stock, including shares that
may be issued upon the exercise of outstanding options in the
public market, the market price of our common stock may
decrease. Such potential sales may make it increasingly
difficult for us to sell equity securities in the future at a
time and price that we deem reasonable and appropriate.

IF WE ARE UNABLE TO MAINTAIN OUR REPUTATION AND
EXPAND OUR NAME RECOGNITION, WE MAY HAVE DIFFICULTY ATTRACTING
NEW BUSINESS AND RETAINING OUR CURRENT CUSTOMER BASE AND
EMPLOYEES, AND OUR BUSINESS MAY SUFFER. Establishing and
maintaining a solid reputation and name recognition are critical
for attracting and retaining customers as well as employees. The
importance of reputation and name recognition is increasing and
will continue to increase due to the growing number and quality
of providers of Web-based business and financial information. If
our reputation is damaged or if potential customers and
employees are not familiar with our services, we may not be able
to attract new, or retain existing, customers and employees. The
promotion and enhancement of our name will depend largely on our
success in continuing to provide valuable services and to
successfully market our services. If customers do not perceive
our services to be effective or high quality, our brand name,
reputation, and business may suffer.

IF THE INTERNET BECOMES SUBJECT TO INCREASED
LEGISLATION AND GOVERNMENT REGULATION, USE OF THE INTERNET AS A
MEDIUM TO RECEIVE SUBSCRIPTION-BASED INFORMATION SERVICES MAY
DECLINE, AND WE MAY BE SUBJECT TO LITIGATION, EITHER OF WHICH
MAY HAVE A MATERIAL AND ADVERSE EFFECT ON OUR BUSINESS, RESULTS
OF OPERATIONS, AND FINANCIAL CONDITION. The laws governing the
Internet continue to be unsettled, even in areas where there has
been legislative action. Legislation may dampen the growth in
the use of the Internet generally and decrease the acceptance of
the Internet as a medium to receive subscription-based
information services. In addition, due to the global nature of
the Internet, it is possible that, although our corporate
headquarters are located in the Commonwealth of Massachusetts
and pre-production and development relating to our services
occurs primarily in the Commonwealth of Massachusetts, other
states, the United States, or foreign countries may attempt to
regulate our services or levy sales or other applicable taxes on
our Web-based products. We cannot guarantee that violations of
federal, state, local or other laws will not be alleged by
governmental entities, that we may not unintentionally violate
these laws or that these laws will not be modified, or new laws
enacted, in the future. Any of these developments may have a
material and adverse effect on our business, financial
condition, and results of operations.

Any one or more of these factors may affect our
business, financial condition, and results of operations, and
this makes the prediction of results of operations on a
quarterly basis unreliable. As a result, we believe that
period-to-period comparisons of our historical results of
operations and annualized contract values are not necessarily
meaningful and should not be relied upon as an indication for
future performance. Also, due to these and other factors, it is
possible that our quarterly results of operations (including the
annualized contract value) may be below expectations. If this
happens, the price of our common stock would likely decrease.

Item 7A. Quantitative and Qualitative
Disclosure About Market Risk

OneSource is exposed to various market risks,
including changes in foreign currency exchange rates and
interest rates. However, our exposure to currency exchange rate
fluctuations has been and is expected to continue to be modest
due to the fact that the operations of our United Kingdom
subsidiary are almost exclusively conducted in local currency.
Operating results are translated into United States dollars and
consolidated for reporting purposes. The impact of currency
exchange rate movements on intercompany transactions was
immaterial for the years ended December 31, 2001, 2000, and
1999. We do not engage in hedging activities.

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OneSource also owns money market funds that are
sensitive to market risks as part of its investment portfolio.
The investment portfolio is used to preserve OneSources
capital until it is required to fund operations, including
OneSources sales and marketing and product development
activities. None of these market-risk sensitive instruments are
held for trading purposes. The investment portfolio contains
instruments that are subject to the risk of a decline in
interest rates. OneSource does not enter into derivatives or any
other financial instruments for trading or speculative purposes.
We have no long-term debt obligations. As of December 31,
2001, OneSource had $18.2 million in cash and cash
equivalents.

Item 8. Financial Statements and
Supplementary Data

OneSources Consolidated Financial
Statements and Schedule and the Reports of Independent
Accountants, are set as indexed in Item 14 on page 29.

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

None.

PART III

Item 10. Directors and Executive Officers
of the Registrant

The information required by this Item is
incorporated by reference to the section entitled
Occupations of Directors and Executive Officers of
OneSources Proxy Statement for its 2002 Annual Meeting of
Stockholders, which will be filed with the Securities and
Exchange Commission within 120 days after December 31,
2001.

Item 11. Executive
Compensation

The information required by this Item is
incorporated by reference to the section entitled
Executive Compensation of OneSources Proxy
Statement for its 2002 Annual Meeting of Stockholders, which
will be filed with the Securities and Exchange Commission within
120 days after December 31, 2001.

Item 12. Security Ownership of Certain
Beneficial Owners and Management

The information required by this Item is
incorporated by reference to the section entitled
Securities Ownership of Certain Beneficial Owners and
Management of OneSources Proxy Statement for its
2002 Annual Meeting of Stockholders, which will be filed with
the Securities and Exchange Commission within 120 days
after December 31, 2001.

Item 13. Certain Relationships and Related
Transactions

The information required by this Item is
incorporated by reference to the section entitled Certain
Relationships and Related Transactions of OneSources
Proxy Statement for its 2002 Annual Meeting of Stockholders,
which will be filed with the Securities and Exchange Commission
within 120 days after December 31, 2001.

28



---



##### Table of Contents






PART IV



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

(a) Documents filed as part of this
report:

The following Consolidated Financial Statements
and Schedules and the Reports of the Independent Accountants are
filed herein:

(1)    Financial Statements:

Index to Consolidated Financial Statements:

|                                                                                                            |  |            
|----------------------------------------------------------------------------------------------------------- |  | -----------
|                                                                                                            |  | Page       
|                                                                                                            |  |            
|Report of Independent Accountants                                                                           |  | F-1        
|Consolidated Balance Sheet at December 31,
        2001 and 2000                                            |  | F-2        
|Consolidated Statement of Operations for the
        years ended December 31, 2001, 2000 and 1999           |  | F-3        
|Consolidated Statement of Stockholders
        Equity for the years ended December 31, 2001, 2000 and 1999 |  | F-4        
|Consolidated Statement of Cash Flows for the
        years ended December 31, 2001, 2000 and 1999           |  | F-5        
|Notes to Consolidated Financial Statements                                                                  |  | F-6 to F-17



| |     |                               
| | --- | ------------------------------
| | (2) | Financial Statement Schedules:

|                                                                          |  |    
|------------------------------------------------------------------------- |  | ---
|Report of Independent Accountants on Financial
        Statement Schedule |  | S-1
|Schedule II  Valuation and
        Qualifying Accounts                   |  | S-2

All other financial statement schedules are
omitted because they are not required, are inapplicable or the
information has been included elsewhere in the financial
statements or notes thereto.

(b) Reports on
Form 8-K

OneSource did not file any reports on
Form 8-K during the quarter ended December 31, 2001.

OneSource hereby files as part of this Annual
Report on Form 10-K the exhibits listed below. Exhibits
that are incorporated herein by reference can be inspected and
copied at the public reference rooms maintained by the
Securities and Exchange Commission in Washington, D.C.; New
York, New York; and Chicago, Illinois. Please call the
Securities and Exchange Commission at 1-800-SEC-0330 for further
information on the public reference rooms. Securities and
Exchange Commission filings are also available to the public
from commercial document retrieval services and at the web site
maintained by the SEC at HTTP:// WWW.SEC.GOV.

29



---



##### Table of Contents



|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|------- | ------ | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |            
|No.     |        | Description
|        |        |            
|        | 2.01   |             |  | Agreement and Plan of Merger dated
        September 8, 1999 by and between the Registrant and
        Corporate Technology Information Services, Inc. (filed as
        Exhibit 2.1 to Form 8-K dated September 8, 1999,
        No. 000-25849 and incorporated herein by reference).                                           
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 2.02   |             |  | Escrow Agreement dated September 8, 1999 by
        and among the Registrant, Corporate Technology Information
        Services, Inc., Andrew Campbell and Citizens Bank of
        Massachusetts (filed as Exhibit 2.2 to Form 8-K dated
        September 8, 1999, No. 000-25849 and incorporated
        herein by reference).
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 3.01   |             |  | Second Amended and Restated Certificate of
        Incorporation of the Registrant, as amended on May 24, 2001.                                                                                                                                                                                                                  
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 3.02   |             |  | Second Amended and Restated By-Laws of the
        Registrant (filed as Exhibit 3.04 to the Registration
        Statement on Form S-1, No. 333-73263 and incorporated
        herein by reference).                                                                                                                             
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 10.01* |             |  | 1993 Stock Purchase and Option Plan (filed as
        Exhibit 10.01 to the Registration Statement on
        Form S-1, No. 333-73263 and incorporated herein by
        reference).                                                                                                                                              
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 10.02* |             |  | 1999 Stock Option and Incentive Plan, as amended
        on May 24, 2001 (filed as Exhibit 10.1 to the
        Quarterly Report on Form 10-Q on August 10, 2001 and
        incorporated herein by reference).                                                                                                                   
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 10.03* |             |  | 1999 Employee Stock Purchase Plan, as amended on
        May 24, 2001 (filed as Exhibit 10.2 to the Quarterly
        Report on Form 10-Q on August 10, 2001 and
        incorporated herein by reference).                                                                                                                      
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 10.04  |             |  | Registration Agreement dated September 8,
        1993 (filed as Exhibit 10.04 to the Registration Statement
        on Form S-1, No. 333-73263 and incorporated herein by
        reference).                                                                                                                                   
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 10.05  |             |  | Lease dated January 20, 1999 by and between
        the Registrant and 300 Baker Avenue Associates, Limited
        Partnership (filed as Exhibit 10.12 to the Registration
        Statement on Form S-1, No. 333-73263 and incorporated
        herein by reference).                                                          
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 10.06  |             |  | Agreement and Plan of Merger dated
        February 26, 1999 by and between the Registrant and
        OneSource Holding Corporation (filed as Exhibit 10.13 to
        the Registration Statement on Form S-1, No. 333-73263
        and incorporated herein by reference).                                                     
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 10.08  |             |  | Form of Management Stock Purchase Agreement
        (filed as Exhibit 10.09 the Registration Statement on Form
        S-1, No. 333-73263 and incorporated herein by reference).                                                                                                                                                 
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 10.09  |             |  | Stock Purchase Agreement dated August 3,
        1993, by and among Lotus Development Corporation, Datext, Inc.
        and Datext Holding Corporation (filed as Exhibit 10.10 to
        the Registration Statement on Form S-1, No. 333-73263
        and incorporated herein by reference).                                   
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 10.10  |             |  | Form of Fee Termination Agreement (filed as
        Exhibit 10.16 to the Registration Statement on
        Form S-1, No. 333-73263 and incorporate herein by
        reference).                                                                                                                                                 
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 10.11  |             |  | Stock Redemption Agreement dated April 21,
        1999 (filed as Exhibit 10.17 to the Registration Statement
        on Form S-1, No. 333-73263 and incorporated herein by
        reference).                                                                                                                                  
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 10.12* |             |  | 2001 Non-Employee Director Stock Option Plan
        dated May 24, 2001 (filed as Exhibit 10.3 to the
        Quarterly Report on Form 10-Q on August 10, 2001 and
        incorporated herein by reference).                                                                                                                    
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 21.01  |             |  | Subsidiaries of the Registrant (filed as
        Exhibit 21.01 to the Annual Report on Form 10-K on
        March 28, 2001 and incorporated herein by reference).                                                                                                                                                                
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 23.02  |             |  | Consent of PricewaterhouseCoopers LLP                                                                                                                                                                                                                                                                                            
|        |        |             |  |                                                                                                                                                                                                                                                                                                                                  
|        | 24.01  |             |  | Power of Attorney (included in signature page)                                                                                                                                                                                                                                                                                   



---



|  |                                                                                                                                                          
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Indicates a management contract or compensatory
        plan, contract, or arrangement required to be filed as an
        exhibit pursuant to Item 14(c).

30



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##### Table of Contents






SIGNATURE

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



| |                                     
| | ------------------------------------
| | ONESOURCE INFORMATION SERVICES, INC.



| |     |                       
| | --- | ----------------------
| | By: | /s/ DANIEL J. SCHIMMEL

| |                                       
| | --------------------------------------
| |                                       
| | President and Chief Executive
	Officer

Date: March 27, 2002

POWER OF ATTORNEY AND SIGNATURES

The undersigned officers and directors of
OneSource Information Services, Inc. hereby severally constitute
and appoint Daniel J. Schimmel and Roy D. Landon, and each of
them singly, with full power of substitution, our true and
lawful attorneys-in-fact and agents to sign for us and in our
names in the capacities indicated below, any amendments to this
Annual Report on Form 10-K, and generally to do all things
in our names and on our behalf in such capacities to enable
OneSource Information Services, Inc. to comply with the
Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange
Commission, in connection with this Annual Report on
Form 10-K.

|                                          |  |                                                                                   |  |                |  | 
|----------------------------------------- |  | --------------------------------------------------------------------------------- |  | -------------- |  | 
|                                          |  |                                                                                   |  |               
|Signature                                 |  | Title(s)                                                                          |  | Date          
|                                          |  |                                                                                   |  |               
|                                         
|/s/ DANIEL J. SCHIMMEL Daniel J. Schimmel |  | President and Chief Executive Officer (principal
	executive officer)              |  | March 27, 2002
|                                         
|/s/ ROY D. LANDON Roy D. Landon           |  | Senior Vice President and
	Chief Financial Officer
	(principal financial officer) |  | March 27, 2002
|                                         
|/s/ MARTIN KAHN Martin Kahn               |  | Chairman of the Board of Directors                                                |  | March 27, 2002
|                                         
|/s/ CARL P. FISHER Carl P. Fisher         |  | Director                                                                          |  | March 27, 2002
|                                         
|/s/ HENRY ANCONA Henry Ancona             |  | Director                                                                          |  | March 27, 2002

31



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##### Table of Contents



REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of 
 OneSource Information Services, Inc.:

In our opinion, the accompanying consolidated
balance sheet and the related consolidated statements of
operations, of changes in stockholders equity and of cash
flows present fairly, in all material respects, the financial
position of OneSource Information Services, Inc. and its
subsidiaries at December 31, 2001 and 2000, and the results
of their operations and their cash flows for each of the three
years in the period ended December 31, 2001 in conformity
with accounting principles generally accepted in the United
States of America. These financial statements are the
responsibility of OneSources management; our
responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally
accepted in the United States of America, which require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.


/S/ PRICEWATERHOUSECOOPERS LLP

Boston, Massachusetts

February 1, 2002


F-1



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##### Table of Contents






ONESOURCE INFORMATION SERVICES, INC.




CONSOLIDATED BALANCE SHEET

(In thousands, except share data)


|                                          |                                                                                                                            |                                                                                                                                                                                 |                                            |                      |     |        |        |         |     |        |        | 
|----------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | -------------------- | --- | ------ | ------ | ------- | --- | ------ | ------ | 
|                                          |                                                                                                                            |                                                                                                                                                                                
|                                          |                                                                                                                            | December 31,                                                                                                                                                                   
|                                          |                                                                                                                            |                                                                                                                                                                                
|                                          |                                                                                                                            | 2001                                                                                                                                                                            |                                            | 2000                
|                                          |                                                                                                                            |                                                                                                                                                                                 |                                            |                     
|ASSETS                                   
|Current assets:                           |                                                                                                                            |                                                                                                                                                                                 |                                            |                      |     |        |        |        
|                                          | Cash and cash equivalents                                                                                                  |                                                                                                                                                                                 | $                                          | 18,162               |     |        | $      | 17,338  |    
|                                          | Accounts receivable, net of allowance for
	doubtful accounts of $770 and $672 at December 31, 2001 and
	2000, respectively |                                                                                                                                                                                 |                                            | 16,925               |     |        |        | 19,373  |    
|                                          | Deferred subscription costs                                                                                                |                                                                                                                                                                                 |                                            | 4,475                |     |        |        | 7,281   |    
|                                          | Prepaid expenses and other current assets                                                                                  |                                                                                                                                                                                 |                                            | 380                  |     |        |        | 314     |    
|                                          |                                                                                                                            |                                                                                                                                                                                 |                                            |                      |     |        |        |        
|                                          |                                                                                                                            |                                                                                                                                                                                 |                                            | Total current assets |     |        | 39,942 |         |     |        | 44,306 | 
|Property and equipment, net               |                                                                                                                            |                                                                                                                                                                                 | 4,353                                      |                      |     |        | 5,118  |        
|Goodwill and other intangible assets, net |                                                                                                                            |                                                                                                                                                                                 | 6,623                                      |                      |     |        | 8,103  |        
|Restricted time deposit                   |                                                                                                                            |                                                                                                                                                                                 | 603                                        |                      |     |        | 603    |        
|Long-term deferred subscription costs     |                                                                                                                            |                                                                                                                                                                                 | 1,026                                      |                      |     |        |       |        
|Other assets, net                         |                                                                                                                            |                                                                                                                                                                                 | 996                                        |                      |     |        | 702    |        
|                                          |                                                                                                                            |                                                                                                                                                                                 |                                            |                      |     |        |        |        
|                                          |                                                                                                                            |                                                                                                                                                                                 | Total assets                               |                      | $   | 53,543 |        |         | $   | 58,832 |       
|                                          |                                                                                                                            |                                                                                                                                                                                 |                                            |                      |     |        |        |        
|LIABILITIES AND STOCKHOLDERS
	EQUITY    
|Current liabilities:                      |                                                                                                                            |                                                                                                                                                                                 |                                            |                      |     |        |        |        
|                                          | Current portion of capital lease obligations                                                                               |                                                                                                                                                                                 | $                                          |                     |     |        | $      | 33      |    
|                                          | Accounts payable                                                                                                           |                                                                                                                                                                                 |                                            | 1,734                |     |        |        | 1,859   |    
|                                          | Accrued compensation and benefits                                                                                          |                                                                                                                                                                                 |                                            | 2,171                |     |        |        | 3,367   |    
|                                          | Accrued expenses                                                                                                           |                                                                                                                                                                                 |                                            | 2,655                |     |        |        | 2,497   |    
|                                          | Accrued royalties                                                                                                          |                                                                                                                                                                                 |                                            | 3,839                |     |        |        | 5,494   |    
|                                          | Deferred revenues                                                                                                          |                                                                                                                                                                                 |                                            | 27,144               |     |        |        | 29,229  |    
|                                          |                                                                                                                            |                                                                                                                                                                                 |                                            |                      |     |        |        |        
|                                          |                                                                                                                            |                                                                                                                                                                                 | Total current liabilities                  |                      |     | 37,543 |        |         |     | 42,479 |       
|                                          |                                                                                                                            |                                                                                                                                                                                 |                                            |                      |     |        |        |        
|Commitments (Note 15)                     |                                                                                                                            |                                                                                                                                                                                 |                                           |                      |     |        |       |        
|Stockholders equity:                     |                                                                                                                            |                                                                                                                                                                                 |                                            |                      |     |        |        |        
|                                          | Preferred stock, $0.01 par value:                                                                                          |                                                                                                                                                                                 |                                            |                      |     |        |        |         |    
|                                          |                                                                                                                            | 1,000,000 shares authorized; no shares issued and
	outstanding at December 31, 2001 and 2000                                                                                    |                                            |                      |    |        |        |         |    |       
|                                          | Common stock, $0.01 par value:                                                                                             |                                                                                                                                                                                 |                                            |                      |     |        |        |         |    
|                                          |                                                                                                                            | 35,000,000 shares authorized; 13,021,464 shares
	issued and 12,060,864 shares outstanding at December 31,
	2001; 12,158,467 shares issued and outstanding at
	December 31, 2000 |                                            |                      | 130 |        |        |         | 122 |       
|                                          | Additional paid-in capital                                                                                                 |                                                                                                                                                                                 |                                            | 33,154               |     |        |        | 30,309  |    
|                                          | Unearned compensation                                                                                                      |                                                                                                                                                                                 |                                            | (77                  | )   |        |        | (174    | )  
|                                          | Accumulated deficit                                                                                                        |                                                                                                                                                                                 |                                            | (9,377               | )   |        |        | (14,033 | )  
|                                          | Accumulated other comprehensive income                                                                                     |                                                                                                                                                                                 |                                            | 267                  |     |        |        | 129     |    
|                                          | Treasury stock, at cost                                                                                                    |                                                                                                                                                                                 |                                            | (8,097               | )   |        |        |        |    
|                                          |                                                                                                                            |                                                                                                                                                                                 |                                            |                      |     |        |        |        
|                                          |                                                                                                                            |                                                                                                                                                                                 | Total stockholders equity                 |                      |     | 16,000 |        |         |     | 16,353 |       
|                                          |                                                                                                                            |                                                                                                                                                                                 |                                            |                      |     |        |        |        
|                                          |                                                                                                                            |                                                                                                                                                                                 | Total liabilities and stockholders equity |                      | $   | 53,543 |        |         | $   | 58,832 |       
|                                          |                                                                                                                            |                                                                                                                                                                                 |                                            |                      |     |        |        |        

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

F-2



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##### Table of Contents






ONESOURCE INFORMATION SERVICES, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share
data)


|                                            |                                                       |                                                  |        |        |        |      |        |        |        |   |        |        |        |  
|------------------------------------------- | ----------------------------------------------------- | ------------------------------------------------ | ------ | ------ | ------ | ---- | ------ | ------ | ------ | - | ------ | ------ | ------ | -
|                                            |                                                       |                                                 
|                                            |                                                       | Year ended December 31,                         
|                                            |                                                       |                                                 
|                                            |                                                       | 2001                                             |        | 2000   |        | 1999
|                                            |                                                       |                                                  |        |        |        |     
|Revenues:                                   |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|                                            | Web-based product                                     |                                                  | $      | 56,318 |        |      | $      | 47,275 |        |   | $      | 31,822 |       
|                                            | CD Rom product and other                              |                                                  |        | 2,699  |        |      |        | 4,614  |        |   |        | 3,726  |       
|                                            |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|                                            |                                                       |                                                  | 59,017 |        |        |      | 51,889 |        |        |   | 35,548 |       
|                                            |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|Cost of revenues:                           |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|                                            | Web-based product                                     |                                                  |        | 16,431 |        |      |        | 15,536 |        |   |        | 13,143 |       
|                                            | CD Rom product and other                              |                                                  |        | 2,065  |        |      |        | 2,373  |        |   |        | 1,666  |       
|                                            |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|                                            |                                                       |                                                  | 18,496 |        |        |      | 17,909 |        |        |   | 14,809 |       
|                                            |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|                                            | Gross profit                                          |                                                  |        | 40,521 |        |      |        | 33,980 |        |   |        | 20,739 |       
|                                            |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|Operating expenses:                         |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|                                            | Selling and marketing                                 |                                                  |        | 18,447 |        |      |        | 20,519 |        |   |        | 13,254 |       
|                                            | Platform and product development                      |                                                  |        | 8,360  |        |      |        | 8,842  |        |   |        | 7,996  |       
|                                            | General and administrative                            |                                                  |        | 5,889  |        |      |        | 5,079  |        |   |        | 5,474  |       
|                                            | Restructuring                                         |                                                  |        | 660    |        |      |        |       |        |   |        |       |       
|                                            | Amortization of goodwill and other intangible
	assets |                                                  |        | 1,480  |        |      |        | 1,503  |        |   |        | 376    |       
|                                            |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|                                            |                                                       | Total operating expenses                         |        |        | 34,836 |      |        |        | 35,943 |   |        |        | 27,100 |  
|                                            |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|                                            |                                                       | Income (loss) from operations                    |        |        | 5,685  |      |        |        | (1,963 | ) |        |        | (6,361 | )
|Interest expense                            |                                                       |                                                  | (50    | )      |        |      | (91    | )      |        |   | (663   | )     
|Interest income                             |                                                       |                                                  | 903    |        |        |      | 978    |        |        |   | 710    |       
|Other income                                |                                                       |                                                  |       |        |        |      | 2,000  |        |        |   | 2,000  |       
|                                            |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|                                            |                                                       | Income (loss) before provision for income
	taxes |        |        | 6,538  |      |        |        | 924    |   |        |        | (4,314 | )
|Provision for income taxes                  |                                                       |                                                  | 1,882  |        |        |      | 66     |        |        |   | 133    |       
|                                            |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|                                            |                                                       | Net income (loss)                                |        | $      | 4,656  |      |        | $      | 858    |   |        | $      | (4,447 | )
|                                            |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|Basic earnings (loss) per share             |                                                       | $                                                | 0.37   |        |        | $    | 0.07   |        |        | $ | (0.50  | )     
|Diluted earnings (loss) per share           |                                                       | $                                                | 0.34   |        |        | $    | 0.06   |        |        | $ | (0.50  | )     
|Weighted average common shares outstanding: |                                                       |                                                  |        |        |        |      |        |        |        |   |        |       
|                                            | Basic                                                 |                                                  |        | 12,424 |        |      |        | 11,509 |        |   |        | 8,822  |       
|                                            | Diluted                                               |                                                  |        | 13,519 |        |      |        | 13,509 |        |   |        | 8,822  |       

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

F-3



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##### Table of Contents






ONESOURCE INFORMATION SERVICES, INC.

CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS EQUITY

(In thousands, except share data)


|                                                                                     |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |        |  
|------------------------------------------------------------------------------------ | -------------------- | ------------ | -------- | ------------ |  | ---------- | ------ | -------- |  | ----------- | ---------- | ------------- |  | -------------- | --- | ------------- |  | ------------- | ------ | ------ |  | --------- | ---- | ------ |  | - | ------- | - |  | - | ---- | - |  |  | -------- | - |  | - | ------ | - |  | - | ------ | - |  | - | ------ | ------ | -
|                                                                                     |                      |              |          |              |  |            |        |          |  |             |            |               |  | Accumulated    |     |               |  |               |        |        |  |          
|                                                                                     |                      | Class P      |          |              |  |            |        |          |  |             |            | Other         |  |                |     | Total         |  |              
|                                                                                     |                      | Common Stock |          | Common Stock |  | Additional |        |          |  |             |            | Comprehensive |  | Treasury Stock |     | Stockholders |  | Comprehensive
|                                                                                     |                      |              |          |              |  | Paid-in    |        | Unearned |  | Accumulated |            | Income        |  |                |     | Equity        |  | Income       
|                                                                                     |                      | Shares       |          | Amount       |  | Shares     |        | Amount   |  | Capital     |            | Compensation  |  | Deficit        |     | (Loss)        |  | Shares        |        | Amount |  | (Deficit) |      | (Loss)
|                                                                                     |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |       
|Balance, December 31, 1998                                                           |                      |              | 717,119  |              |  | $          | 3,524  |          |  |             | 6,775,313  |               |  | $              | 68  |               |  | $             | 724    |        |  | $         | (39  | )      |  | $ | (10,444 | ) |  | $ | (138 | ) |  |  | 109,890  |   |  | $ | (6     | ) |  | $ | (6,311 | ) |  |   |        |       
|Comprehensive loss:                                                                  |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |       
|Net loss                                                                             |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   | (4,447  | ) |  |   |      |   |  |  |          |   |  |   |        |   |  |   | (4,447 | ) |  | $ | (4,447 | )     
|Foreign currency translation adjustment                                              |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   | 55   |   |  |  |          |   |  |   |        |   |  |   | 55     |   |  |   | 55     |       
|                                                                                     |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |       
|                                                                                     | Comprehensive loss   |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |  |  |   |        | (4,392 | )
|                                                                                     |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |       
|Conversion of Class P common stock and the
	preference amount to common stock        |                      |              | (717,119 | )            |  |            | (3,524 | )        |  |             | 999,328    |               |  |                | 10  |               |  |               | 3,514  |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |       |   |  |   |        |       
|Repurchase and retirement of common stock                                            |                      |              |          |              |  |            |        |          |  |             | (282,209   | )             |  |                | (3  | )             |  |               | (3,384 | )      |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | (3,387 | ) |  |   |        |       
|Retirement of treasury stock                                                         |                      |              |          |              |  |            |        |          |  |             | (109,890   | )             |  |                | (1  | )             |  |               | (5     | )      |  |           |      |        |  |   |         |   |  |   |      |   |  |  | (109,890 | ) |  |   | 6      |   |  |   |       |   |  |   |        |       
|Issuance of common stock pursuant to initial
	public offering, net of offering costs |                      |              |          |              |  |            |        |          |  |             | 2,500,000  |               |  |                | 25  |               |  |               | 26,890 |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 26,915 |   |  |   |        |       
|Unearned compensation relating to grants of stock
	options                           |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               | 346    |        |  |           | (346 | )      |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |       |   |  |   |        |       
|Amortization of unearned compensation relating to
	grants of stock options           |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           | 114  |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 114    |   |  |   |        |       
|Issuance of common stock pursuant to exercise of
	options                            |                      |              |          |              |  |            |        |          |  |             | 415,538    |               |  |                | 4   |               |  |               | 415    |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 419    |   |  |   |        |       
|Issuance of common stock pursuant to exercise of
	warrants                           |                      |              |          |              |  |            |        |          |  |             | 83,029     |               |  |                | 1   |               |  |               | 4      |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 5      |   |  |   |        |       
|                                                                                     |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |       
|Balance, December 31, 1999                                                           |                      |              |         |              |  |            |       |          |  |             | 10,381,109 |               |  |                | 104 |               |  |               | 28,504 |        |  |           | (271 | )      |  |   | (14,891 | ) |  |   | (83  | ) |  |  |         |   |  |   |       |   |  |   | 13,363 |   |  |   |        |       
|Comprehensive income:                                                                |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |       
|Net income                                                                           |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   | 858     |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 858    |   |  |   | 858    |       
|Foreign currency translation adjustment                                              |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   | 212  |   |  |  |          |   |  |   |        |   |  |   | 212    |   |  |   | 212    |       
|                                                                                     |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |       
|                                                                                     | Comprehensive income |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        | 1,070  |  
|                                                                                     |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |       
|Amortization of unearned compensation relating to
	grants of stock options           |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           | 97   |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 97     |   |  |   |        |       
|Issuance of common stock pursuant to exercise of
	options                            |                      |              |          |              |  |            |        |          |  |             | 1,341,024  |               |  |                | 14  |               |  |               | 1,532  |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 1,546  |   |  |   |        |       
|Issuance of common stock pursuant to the employee
	stock purchase plan               |                      |              |          |              |  |            |        |          |  |             | 31,184     |               |  |                |    |               |  |               | 273    |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 273    |   |  |   |        |       
|Issuance of common stock pursuant to exercise of
	warrants                           |                      |              |          |              |  |            |        |          |  |             | 405,150    |               |  |                | 4   |               |  |               |       |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 4      |   |  |   |        |       
|                                                                                     |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |       
|Balance, December 31, 2000                                                           |                      |              |         |              |  |            |       |          |  |             | 12,158,467 |               |  |                | 122 |               |  |               | 30,309 |        |  |           | (174 | )      |  |   | (14,033 | ) |  |   | 129  |   |  |  |         |   |  |   |       |   |  |   | 16,353 |   |  |   |        |       
|Comprehensive income:                                                                |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |       
|Net income                                                                           |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   | 4,656   |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 4,656  |   |  |   | 4,656  |       
|Foreign currency translation adjustment                                              |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   | 138  |   |  |  |          |   |  |   |        |   |  |   | 138    |   |  |   | 138    |       
|                                                                                     |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |       
|                                                                                     | Comprehensive income |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   | $      | 4,794  |  
|                                                                                     |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |       
|Amortization of unearned compensation relating to
	grants of stock options           |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           | 97   |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 97     |   |  |   |        |       
|Issuance of common stock pursuant to exercise of
	options                            |                      |              |          |              |  |            |        |          |  |             | 812,030    |               |  |                | 8   |               |  |               | 1,601  |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 1,609  |   |  |   |        |       
|Issuance of common stock pursuant to the employee
	stock purchase plan               |                      |              |          |              |  |            |        |          |  |             | 50,967     |               |  |                |    |               |  |               | 379    |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 379    |   |  |   |        |       
|Repurchase of common stock                                                           |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  | 960,600  |   |  |   | (8,097 | ) |  |   | (8,097 | ) |  |   |        |       
|Tax benefits of disqualifying dispositions of
	stock options                         |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               | 865    |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   | 865    |   |  |   |        |       
|                                                                                     |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |       
|Balance, December 31, 2001                                                           |                      |              |         |              |  | $          |       |          |  |             | 13,021,464 |               |  | $              | 130 |               |  | $             | 33,154 |        |  | $         | (77  | )      |  | $ | (9,377  | ) |  | $ | 267  |   |  |  | 960,600  |   |  | $ | (8,097 | ) |  | $ | 16,000 |   |  |   |        |       
|                                                                                     |                      |              |          |              |  |            |        |          |  |             |            |               |  |                |     |               |  |               |        |        |  |           |      |        |  |   |         |   |  |   |      |   |  |  |          |   |  |   |        |   |  |   |        |   |  |   |        |       

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

F-4



---



##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.






CONSOLIDATED STATEMENT OF CASH FLOWS


(In thousands)


|                                                              |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |        |         |        |  
|------------------------------------------------------------- | ------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------- | ------ | -
|                                                              |                                                                                                   |                                                                                                                     
|                                                              |                                                                                                   | Year ended December 31,                                                                                             
|                                                              |                                                                                                   |                                                                                                                     
|                                                              |                                                                                                   | 2001                                                                                                                 |                                       | 2000   |        | 1999  
|                                                              |                                                                                                   |                                                                                                                      |                                       |        |        |       
|Increase (Decrease) in Cash and Cash Equivalents              |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|Cash flows relating to operating activities:                  |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|                                                              | Net income (loss)                                                                                 |                                                                                                                      | $                                     | 4,656  |        |        | $      | 858    |        |        | $      | (4,447 | )      
|                                                              | Adjustments to reconcile net income
	(loss) to net cash provided (used) by operating
	activities: |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |        |        
|                                                              |                                                                                                   | Depreciation and amortization                                                                                        |                                       |        | 3,067  |        |        |        | 2,521  |        |        |        | 1,661   |       
|                                                              |                                                                                                   | Amortization of goodwill and other intangible
	assets                                                                |                                       |        | 1,480  |        |        |        | 1,503  |        |        |        | 376     |       
|                                                              |                                                                                                   | Amortization of unearned compensation relating to
	grants of stock options                                           |                                       |        | 97     |        |        |        | 97     |        |        |        | 114     |       
|                                                              |                                                                                                   | Tax benefits of disqualifying dispositions of
	stock options                                                         |                                       |        | 865    |        |        |        |       |        |        |        |        |       
|                                                              |                                                                                                   | Amortization of debt discount                                                                                        |                                       |        |       |        |        |        |       |        |        |        | 52      |       
|                                                              |                                                                                                   | Loss on disposal of property and equipment                                                                           |                                       |        | 23     |        |        |        |       |        |        |        |        |       
|                                                              |                                                                                                   | Changes in assets and liabilities, net of effects
	of acquisition of Corporate Technology Information Services, Inc. |                                       |        |        |        |        |        |        |        |        |        |         |       
|                                                              |                                                                                                   |                                                                                                                      | Accounts receivable                   |        |        | 2,413  |        |        |        | (5,225 | )      |        |         | (4,294 | )
|                                                              |                                                                                                   |                                                                                                                      | Deferred subscription costs           |        |        | 2,807  |        |        |        | (56    | )      |        |         | (563   | )
|                                                              |                                                                                                   |                                                                                                                      | Prepaid expenses and other assets     |        |        | (65    | )      |        |        | 1      |        |        |         | (266   | )
|                                                              |                                                                                                   |                                                                                                                      | Long-term deferred subscription costs |        |        | (1,026 | )      |        |        |       |        |        |         |       |  
|                                                              |                                                                                                   |                                                                                                                      | Accounts payable                      |        |        | (95    | )      |        |        | 433    |        |        |         | 523    |  
|                                                              |                                                                                                   |                                                                                                                      | Accrued expenses                      |        |        | (1,247 | )      |        |        | 1,281  |        |        |         | 528    |  
|                                                              |                                                                                                   |                                                                                                                      | Accrued royalties                     |        |        | (1,655 | )      |        |        | (266   | )      |        |         | 1,134  |  
|                                                              |                                                                                                   |                                                                                                                      | Deferred revenues                     |        |        | (1,890 | )      |        |        | 5,472  |        |        |         | 4,580  |  
|                                                              |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|                                                              |                                                                                                   | Net cash provided (used) by operating
	activities                                                                    |                                       |        | 9,430  |        |        |        | 6,619  |        |        |        | (602    | )     
|                                                              |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|Cash flows relating to investing activities:                  |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|                                                              | Proceeds from (investment in) restricted time
	deposits                                           |                                                                                                                      |                                       |       |        |        |        | 100    |        |        |        | (603   | )      
|                                                              | Purchases of property and equipment                                                               |                                                                                                                      |                                       | (1,843 | )      |        |        | (4,014 | )      |        |        | (2,759 | )      
|                                                              | Capitalization of software development costs                                                      |                                                                                                                      |                                       | (759   | )      |        |        | (530   | )      |        |        | (225   | )      
|                                                              | Acquisition of Corporate Technology, net of cash
	acquired                                        |                                                                                                                      |                                       |       |        |        |        |       |        |        |        | (7,560 | )      
|                                                              |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|                                                              |                                                                                                   | Net cash used by investing activities                                                                                |                                       |        | (2,602 | )      |        |        | (4,444 | )      |        |        | (11,147 | )     
|                                                              |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|Cash flows relating to financing activities:                  |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|                                                              | Proceeds from issuance of common stock, net                                                       |                                                                                                                      |                                       | 1,988  |        |        |        | 1,823  |        |        |        | 27,339 |        
|                                                              | Repurchase of Class P common stock                                                                |                                                                                                                      |                                       |       |        |        |        |       |        |        |        | (3,387 | )      
|                                                              | Repurchase of common stock                                                                        |                                                                                                                      |                                       | (8,097 | )      |        |        |       |        |        |        |       |        
|                                                              | Repayment of long-term debt                                                                       |                                                                                                                      |                                       |       |        |        |        |       |        |        |        | (6,722 | )      
|                                                              | Repayments of capital lease obligations                                                           |                                                                                                                      |                                       | (33    | )      |        |        | (201   | )      |        |        | (549   | )      
|                                                              |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|                                                              |                                                                                                   | Net cash provided (used) by financing
	activities                                                                    |                                       |        | (6,142 | )      |        |        | 1,622  |        |        |        | 16,681  |       
|                                                              |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|Effect of exchange rate changes on cash and cash
	equivalents |                                                                                                   |                                                                                                                      | 138                                   |        |        |        | (57    | )      |        |        | 1      |       
|                                                              |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|Increase in cash and cash equivalents                         |                                                                                                   |                                                                                                                      | 824                                   |        |        |        | 3,740  |        |        |        | 4,933  |       
|Cash and cash equivalents, beginning of year                  |                                                                                                   |                                                                                                                      | 17,338                                |        |        |        | 13,598 |        |        |        | 8,665  |       
|                                                              |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|Cash and cash equivalents, end of year                        |                                                                                                   | $                                                                                                                    | 18,162                                |        |        | $      | 17,338 |        |        | $      | 13,598 |       
|                                                              |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|Supplemental disclosure of cash flow information:             |                                                                                                   |                                                                                                                      |                                       |        |        |        |        |        |        |        |        |       
|                                                              | Cash paid for interest                                                                            |                                                                                                                      | $                                     | 1      |        |        | $      | 16     |        |        | $      | 810    |        
|                                                              | Cash paid for taxes                                                                               |                                                                                                                      |                                       | 333    |        |        |        | 73     |        |        |        | 162    |        

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

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##### Table of Contents






ONESOURCE INFORMATION SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

1.     Nature of
Business

OneSource and its wholly-owned subsidiaries
provide Web-based business and financial information products to
professionals in corporations and other enterprises and also
distribute information on private technology companies.
OneSource primarily sells its products through a direct sales
force located throughout the United States and United Kingdom.
OneSource manages its business as a single segment.

2.     Summary of
Significant Accounting Policies

Principles of
Consolidation

The consolidated financial statements include the
accounts of OneSource Information Services, Inc. and its
wholly-owned subsidiaries: Corporate Technology Information
Services, Inc. and OneSource Information Services Limited
(collectively, OneSource). All significant
intercompany transactions and balances have been eliminated.

Revenue
Recognition

OneSources products are sold on a
subscription basis pursuant to customer contracts that span
varying periods of time but are generally for a period of one
year. OneSource initially records receivables and defers the
related revenues when persuasive evidence of an arrangement
exists, fees are fixed or determinable, and collection is
reasonably assured. Revenues are recognized ratably over the
related subscription period beginning when access to products is
granted to the customer in accordance with customer agreements.

Subscription
Costs

Subscription costs represent sales commission and
royalty costs that are associated with securing a subscription
and procuring information to be delivered over the subscription
period, respectively. These costs are deferred and amortized
ratably over the associated subscription period as a component
of selling and marketing expense and cost of revenues,
respectively. At December 31, 2001 and 2000, deferred
subscription costs consisted of $1.3 million and
$2.1 million, respectively, related to sales commissions
and $4.2 million and $5.2 million, respectively,
related to royalties.

Cash and Cash
Equivalents

Cash equivalents consist of money market funds
with original maturities of three months or less and are stated
at cost which approximates fair market value. These funds are
managed by a financial institution with a strong credit rating.
Accordingly, the investments are subject to minimal credit and
market risks. At December 31, 2001 and 2000, cash
equivalents totaled $16.4 million and $15.3 million,
respectively.

Property and
Equipment

Property and equipment are recorded at cost and
depreciated over their estimated useful lives, generally three
to five years, using the straight-line method. Equipment held
under capital leases is stated at the fair value of the
equipment at inception of the leases and is amortized on a
straight-line basis over the term of the leases.

Advertising Costs

OneSource recognizes advertising expense as
incurred. Advertising expense was $58,000, $87,000 and $42,000
for the years ended December 31, 2001, 2000 and 1999,
respectively.

Goodwill and Other Intangible
Assets

Intangible assets consist primarily of goodwill,
trademark, non-compete agreement, subscriber list and a
database. Intangible assets are amortized using the
straight-line method over periods of three to seven years, based
on the estimated useful life. The carrying value of the
intangible assets is reviewed on a quarterly basis for the
existence of facts or circumstances both internally and
externally that may suggest impairment. To date, no such
impairment has occurred. OneSource determines whether an
impairment has occurred based on

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ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

gross expected future cash flows and measures the
amount of the impairment based on the related future estimated
discounted cash flows. The cash flow estimates used to determine
the impairment, if any, contain managements best
estimates, using appropriate and customary assumptions and
projections at the time. In July 2001, the Financial Accounting
Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 142, Goodwill
and Other Intangible Assets. SFAS No. 142 requires
goodwill to be tested for impairment under certain
circumstances, and written off when impaired, rather than being
amortized as previous standards required. OneSource is currently
assessing the impact of SFAS No. 142 on its financial
position and results of operations.

Platform and Product
Development and Software Development Costs

Platform and product development costs, other
than certain software development costs, are charged to expense
as incurred. Statement of Position (SOP) 98-1,
Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use, requires research and
development costs associated with the application development
stage to be capitalized for internal use software. At
December 31, 2001 and 2000, capitalized software
development costs pursuant to SOP 98-1, net of accumulated
amortization, was $912,000 and $612,000, respectively.
Capitalized software development costs are generally amortized
over three years, using the straight-line method. For the years
ended December 31, 2001, 2000 and 1999, amortization of
capitalized software development costs amounted to $460,000,
$224,000 and $229,000, respectively.

Financial
Instruments

The carrying amounts reflected in the
consolidated balance sheet for cash and cash equivalents,
restricted time deposits, accounts receivable, and capital lease
obligations approximate their fair value due to the short-term
maturities of these instruments.

Concentration of Credit
Risk

Financial instruments, which potentially subject
the Company to concentrations of credit risk, consist primarily
of cash, cash equivalents, and accounts receivables. In
accordance with OneSources cash investment policy, the
majority of its investments are made in investment grade
securities and are managed by financial institutions with strong
credit ratings. At December 31, 2001 and periodically
throughout the year, OneSource has maintained cash balances in
various operating accounts in excess of federally insured
limits. OneSource limits the amount of credit exposure with any
one financial institution by evaluating the creditworthiness of
the financial institutions with which it invests.

Concentration of credit risk with respect to
accounts receivable is limited due to the large number of
companies comprising OneSources client base. Ongoing
credit evaluations of customers financial condition are
performed and collateral is generally not required. OneSource
maintains reserves for potential credit losses and such losses,
in the aggregate, have not exceeded managements
expectations. Management believes the risk with respect to
accounts receivables is mitigated by the fact that the
Companys customer base is geographically widespread and is
highly diversified. As of December 31, 2001 and 2000,
OneSources single largest outstanding accounts receivable
balance represented 6% and 5%, respectively, of its total
outstanding accounts receivable. No single customer accounted
for 3% or more of annual revenues for the years ended
December 31, 2001, 2000 and 1999.

Accounting for Stock-Based
Compensation

OneSource accounts for stock-based compensation
to employees in accordance with Accounting Principles Board
Opinion (APB) No. 25, Accounting for
Stock Issued to Employees, FASB Interpretation
No. 44, Accounting for Certain Transactions Involving
Stock-Based Compensation-Interpretation of APB Opinion
No. 25, and related interpretations. Accordingly,
compensation expense is recorded for options issued to employees
in fixed amounts to the extent that the fixed exercise prices
are less than the fair market value of OneSources common
stock at the date of grant. OneSource follows the disclosure
requirements of SFAS No. 123, Accounting for
Stock-Based Compensation (Note 9). All stock-based awards
to non-employees are accounted for at their fair value in
accordance with SFAS No. 123.

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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Earnings Per
Share

Earnings per share is computed in accordance with
SFAS No. 128, Earnings Per Share. SFAS
No. 128 requires the presentation of two amounts: basic
earnings per share and diluted earnings per share. Basic
earnings per share is computed by dividing net income
(loss) by the weighted average number of shares of common
stock outstanding during the year. Diluted earnings per share is
computed by dividing net income (loss) by the sum of the
weighted average number of shares of common stock outstanding
during the year plus, when dilutive, the weighted average number
of shares of potential common stock from the assumed exercise of
stock options and warrants using the treasury stock method.

Foreign Currency
Translation

Assets and liabilities of OneSources United
Kingdom operations, where the local currency is the functional
currency, are translated into US dollars at the exchange rate in
effect as of the balance sheet date, while revenues and expenses
are translated at average exchange rates during the period. The
resultant translation adjustment is reflected as a separate
component of stockholders equity. Transaction gains and
losses, which are not material in amount, are reflected in the
consolidated statement of operations.

Use of Estimates

The preparation of financial statements in
conformity with generally accepted accounting principles
requires OneSource management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates.

Recently Issued Accounting
Pronouncements

In July 2001, the FASB issued SFAS No. 141,
Business Combinations, and SFAS No. 142,
Goodwill and Other Intangible Assets. SFAS
No. 141 requires use of the purchase method of accounting
for business combinations initiated after June 30, 2001 and
eliminated the pooling-of-interests method. SFAS No. 142 is
effective for OneSource on January 1, 2002 and requires,
among other things, the discontinuance of goodwill amortization.
In addition, the standard includes provisions for the
reclassification of certain existing recognized intangible
assets into goodwill, the reassessment of the useful lives of
existing recognized intangible assets, the reclassification of
certain intangible assets out of previously reported goodwill
and the identification of reporting units for purposes of
assessing potential future impairments of goodwill. SFAS
No. 142 also requires OneSource to complete a transitional
goodwill impairment test within six months from the date of
adoption. OneSource is currently assessing, but has not yet
determined, the impact of SFAS No. 142 on its financial
position and results of operations. OneSources
amortization of goodwill was $1.0 million in the year ended
December 31, 2001. Goodwill, net of accumulated
amortization, was $5.0 million at December 31, 2001.

In June 2001, the FASB issued SFAS No. 143,
Accounting for Asset Retirement Obligations, which
is effective January 1, 2003. SFAS No.143 addresses the
financial accounting and reporting for obligations and
retirement costs related to the retirement of tangible
long-lived assets. OneSource does not expect that the adoption
of SFAS No.143 will have a significant impact on its financial
position and results of operations.

In August 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, which is effective January 1,
2002. SFAS No. 144 supersedes SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, and the accounting
and reporting provisions relating to the disposal of a segment
of a business of Accounting Principles Board Opinion
No. 30. OneSource does not expect that the adoption of SFAS
No. 144 will have a significant impact on its financial
position and results of operations.

3.     Acquisition

On October 1, 1999, OneSource acquired
Corporate Technology Information Services, Inc., a Delaware
corporation located in Woburn, Massachusetts (the
Acquisition). Corporate Technology Information

F-8



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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Services, Inc. is a provider of high technology
company profiles with a focus on emerging private companies.
Pursuant to the terms of an Agreement and Plan of Merger, the
consideration paid by OneSource was $7.6 million in cash. A
portion of the cash consideration was held in escrow and
subsequently released in accordance with the Agreement and Plan
of Merger and an Escrow Agreement. The Corporate Technology
Information Services, Inc. acquisition has been accounted for
under the purchase method of accounting. Accordingly, the
purchase price was allocated based upon an independent
professional appraisal of the fair value of assets acquired and
liabilities assumed. The excess of the purchase price over the
fair value of the tangible assets acquired of $1.0 million and
liabilities assumed of $2.5 million totaled $9,982,000.
This amount has been included in goodwill and other intangible
assets (Note 4), which is being amortized using the
straight-line method over applicable periods ranging from three
to seven years; related amortization expense totaled $1,480,000,
$1,503,000, and $376,000 for the years ended December 31,
2001, 2000, and 1999, respectively. The operating results of
Corporate Technology Information Services, Inc. have been
included in the financial statements since the date of the
Acquisition.

4.     Goodwill and
Other Intangible Assets

Goodwill and other intangible assets consist of
the following:

|                               |  |                |        |      |  |   |        |  
|------------------------------ |  | -------------- | ------ | ---- |  | - | ------ | -
|                               |  |               
|                               |  | December 31,  
|                               |  |               
|                               |  | 2001           |        | 2000
|                               |  |                |        |     
|                               |  |               
|                               |  | (In thousands)
|Goodwill                       |  | $              | 7,301  |      |  | $ | 7,301  |  
|Non-compete agreement          |  |                | 400    |      |  |   | 400    |  
|Subscriber list                |  |                | 1,150  |      |  |   | 1,150  |  
|Database                       |  |                | 986    |      |  |   | 986    |  
|Trademark                      |  |                | 145    |      |  |   | 145    |  
|                               |  |                |        |      |  |   |        |  
|                               |  |                | 9,982  |      |  |   | 9,982  |  
|Less: accumulated amortization |  |                | (3,359 | )    |  |   | (1,879 | )
|                               |  |                |        |      |  |   |        |  
|                               |  | $              | 6,623  |      |  | $ | 8,103  |  
|                               |  |                |        |      |  |   |        |  

In accordance with SFAS No. 142, OneSource
will cease amortization of goodwill as of January 1, 2002.

5.     Property and
Equipment

Property and equipment consists of the following:

|                                                |  |                |        |      |  |   |        |  
|----------------------------------------------- |  | -------------- | ------ | ---- |  | - | ------ | -
|                                                |  |               
|                                                |  | December 31,  
|                                                |  |               
|                                                |  | 2001           |        | 2000
|                                                |  |                |        |     
|                                                |  |               
|                                                |  | (In thousands)
|Office and computer equipment                   |  | $              | 9,144  |      |  | $ | 8,824  |  
|Furniture and fixtures                          |  |                | 532    |      |  |   | 527    |  
|                                                |  |                |        |      |  |   |        |  
|                                                |  |                | 9,676  |      |  |   | 9,351  |  
|Less: accumulated depreciation and amortization |  |                | (5,323 | )    |  |   | (4,233 | )
|                                                |  |                |        |      |  |   |        |  
|                                                |  | $              | 4,353  |      |  | $ | 5,118  |  
|                                                |  |                |        |      |  |   |        |  

At December 31, 2001, there was no equipment
under capital lease. At December 31, 2000, office and
computer equipment under capital leases totaled $623,000, with
related accumulated amortization of $602,000. During 2001 and
2000, OneSource retired $1,523,000 and $991,000, respectively,
of fully depreciated property and equipment.

Total depreciation expense for the years ended
December 31, 2001, 2000, and 1999 was $2.6 million,
$2.3 million, and $1.4 million, respectively.

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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

6.     Long-Term
Debt

In connection with the acquisition of the
business in 1993, OneSource entered into a subordinated note
agreement with the seller with a face amount of
$5.0 million (the Note). The Note accrued
interest at 8% per annum, payable annually commencing
March 31, 1995 and was discounted to reflect the market
rate of 12% at the time of issuance. The initial discount
totaling $938,000 was being amortized to interest expense over
the life of the Note using the effective interest method.
Interest payments were added to the unpaid principal of the Note
annually if OneSources cash flow, as defined in the Note
agreement, was less than a specified amount.

Upon the completion of its initial public
offering and in accordance with the Note agreement, OneSource
repaid the Note in May 1999 for $6.8 million of principal
and interest. In conjunction with the repayment, OneSource
recognized $272,000 of interest expense, which represented the
remaining unamortized discount on the Note.

7.     Earnings Per
Share

Below is a summary of the shares used in
computing basic and diluted earnings (loss) per share for
the years indicated.

|                                                                                |                                                |                         |        |       |  |      |        |       |  |  |       |   | 
|------------------------------------------------------------------------------- | ---------------------------------------------- | ----------------------- | ------ | ----- |  | ---- | ------ | ----- |  |  | ----- | - | 
|                                                                                |                                                |                        
|                                                                                |                                                | Year ended December 31,
|                                                                                |                                                |                        
|                                                                                |                                                | 2001                    |        | 2000  |  | 1999
|                                                                                |                                                |                         |        |       |  |     
|                                                                                |                                                |                        
|                                                                                |                                                | (In thousands)         
|Weighted-average shares outstanding used for
	basic earnings (loss) per share   |                                                |                         | 12,424 |       |  |      | 11,509 |       |  |  | 8,822 |  
|                                                                                | Incremental shares from dilutive stock options |                         |        | 1,095 |  |      |        | 2,000 |  |  |       |  | 
|                                                                                |                                                |                         |        |       |  |      |        |       |  |  |       |  
|Weighted-average shares outstanding used for
	diluted earnings (loss) per share |                                                |                         | 13,519 |       |  |      | 13,509 |       |  |  | 8,822 |  
|                                                                                |                                                |                         |        |       |  |      |        |       |  |  |       |  

For the years ended December 31, 2001 and
2000, stock options to purchase 1,026,931 and 2,909,101 shares
of common stock, respectively, were outstanding, but were not
included in the computation of diluted earnings per share
because the exercise prices of the options were greater than the
average market price of common stock during the year and
inclusion would be antidilutive. At December 31, 1999,
total potential common stock consists of stock options to
purchase 3,675,794 shares of common stock with a
weighted-average exercise price of $2.72 per share and 407,000
common stock warrants exercisable at $0.06 per share
(Note 8).

8.     Stockholders
Equity

Authorized Shares

The authorized capital stock of OneSource
consists of 35,000,000 shares of common stock, $0.01 par value,
and 1,000,000 shares of undesignated preferred stock, $0.01 par
value.

Voting Rights

All holders of common stock are entitled to one
vote per share on all matters to be voted upon by
OneSources stockholders.

Warrants

In connection with the Note agreement (Note 6),
OneSource issued a warrant exercisable at $0.06 per share for
407,000 shares of OneSources common stock. This warrant
was fully exercised in January 2000.

Public Offering

In May 1999, OneSource completed an initial
public offering of 3,636,000 shares of its common stock, of
which 2,500,000 shares were issued and sold by OneSource, for
net proceeds of $27.0 million. As a result, all

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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

outstanding shares of Class P common stock
were automatically converted into 717,119 shares of
OneSources common stock.

In conjunction with the initial public offering,
OneSource converted the accumulated preference
amount on Class P common stock of $3,387,000 into
282,209 shares of common stock based on the public offering
price of $12.00 per share. Subsequently, OneSource repurchased
and retired the equivalent number of common stock shares issued
for the preference amount at $12.00 per share.

Treasury Stock

In April 2001, OneSource announced a stock
buyback program to repurchase up to 1,000,000 shares of
OneSources common stock over the following twelve months.
As of December 31, 2001, OneSource had repurchased 960,600
shares of its common stock at an average price of $8.43 per
share. In January 2002, OneSource completed the repurchase of
39,400 additional shares of its common stock at an average price
of $8.48 per share, thus completing the initial authorized
buyback program.

In January 2002, OneSource announced a second
stock buyback program to repurchase up to an additional
$5.0 million of its common stock over the following twelve
months.

Reserved Shares

At December 31, 2001, OneSource had reserved
4,282,468 shares of common stock for issuance upon exercise of
common stock options.

9.     Stock
Plans

The 1993 Stock Purchase and Option Plan (the
1993 Plan) provides for the grant of incentive stock
options and non-qualified stock options for the purchase of up
to an aggregate of 4,273,500 shares of OneSources common
stock by employees, directors, consultants, and advisors of
OneSource. The Board of Directors determines the term of each
option, option price, number of shares for which each option is
granted, whether restrictions will be imposed on the shares
subject to options, and the vesting schedule of each option. The
exercise price for incentive stock options granted may not be
less than the fair value per share of the underlying common
stock on the date granted as determined by the Board of
Directors (not less than 110% of the fair value for options
granted to holders of more than 10% of the voting stock of
OneSource). Additionally, the term of the options cannot exceed
ten years (five years for options granted to holders of more
than 10% of the voting stock of OneSource). The options
generally vest over a four-year period. No shares of common
stock remain available for grant under the 1993 Plan.

In February 1999, the Board of Directors of
OneSource approved the 1999 Stock Option and Incentive Plan (the
1999 Plan) to be effective upon OneSources
initial public offering. The 1999 Plan provides for the grant of
stock-based awards to employees, officers and directors of, and
consultants or advisors to, OneSource. The 1999 Plan is
administered by the Board of Directors of OneSource and the
Compensation Committee. Subject to the provisions of the 1999
Plan, each of the Board of Directors and the Compensation
Committee has the authority to select the persons to whom awards
are granted and to determine the terms of each award, including
the number of shares of common stock subject to the award. All
stock options granted pursuant to the 1999 Plan were granted at
fair market value and generally vest over a four year period at
a rate of 25% per year starting on the first anniversary of the
vesting start date. A total of 2,800,000 shares of common stock
are authorized for issuance upon the exercise of options or
other awards granted under the 1999 Plan.

In February 1999, the Board of Directors of
OneSource approved the 1999 Employee Stock Purchase Plan (the
Purchase Plan), to be effective upon
OneSources initial public offering. The Purchase Plan is
administered by the Board of Directors of OneSource or a
committee which the Board may designate. The Purchase Plan is
intended to provide an incentive to, and to encourage stock
ownership by, all eligible employees of OneSource and its
participating subsidiaries so that these employees may share in
the growth of OneSource by acquiring or increasing their
proprietary interest in OneSource. Under the Purchase Plan,
payroll deductions are used to purchase OneSources common
stock for eligible participating employees through the exercise
of stock options. An employee electing to participate in the
Purchase Plan must authorize

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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

an amount (a whole percentage not less than 1%
nor more than 10% of the employees cash compensation,
including base pay or salary and any overtime, bonuses or
commissions) to be deducted by OneSource from the
employees pay and applied toward the purchase of common
stock under the Purchase Plan. The Purchase Plan provides for
the issuance of a maximum of 200,000 shares of common stock.

In March 2001, the Board of Directors of
OneSource approved the 2001 Non-employee Director Stock Option
Plan (the Director Plan). The Director Plan was
ratified by the stockholders in May 2001. The purpose of the
Director Plan is to promote the interests of OneSource by
providing an inducement to obtain and retain the services of
qualified persons who are not employees or officers of OneSource
(Non-Employee Directors) to serve as members of its
Board of Directors. The Director Plan is administered by the
Compensation Committee of the Board of Directors of OneSource.
Options may be granted to Non-Employee Directors and will
generally vest annually at the rate of 25% per year from the
date of grant and become immediately exercisable in full upon a
change in control of OneSource. The exercise price per share for
all options granted under the Director Plan will be equal to the
fair market value per share of the common stock on the date of
grant. The Director Plan provides for the issuance of a maximum
of 300,000 shares of common stock.

Transactions under the 1993 Plan, 1999 Plan and
Director Plan during the years ended December 31, 1999,
2000, and 2001 are summarized as follows:

|                                |           |           |           |                |   |   |      |      | 
|------------------------------- | --------- | --------- | --------- | -------------- | - | - | ---- | ---- | 
|                                |           |           |           | Weighted-     
|                                |           | Number of |           | average       
|                                |           | shares    |           | exercise price
|                                |           |           |           |               
|Outstanding  December 31, 1998 |           |           | 3,547,916 |                |   | $ | 1.43 |     
|                                | Granted   |           |           | 641,613        |   |   |      | 9.19 | 
|                                | Exercised |           |           | (415,538       | ) |   |      | 0.99 | 
|                                | Forfeited |           |           | (98,197        | ) |   |      | 5.44 | 
|                                |           |           |           |                |   |   |      |     
|Outstanding  December 31, 1999 |           |           | 3,675,794 |                |   |   | 2.72 |     
|                                | Granted   |           |           | 790,915        |   |   |      | 8.41 | 
|                                | Exercised |           |           | (1,341,024     | ) |   |      | 0.74 | 
|                                | Forfeited |           |           | (241,212       | ) |   |      | 8.58 | 
|                                |           |           |           |                |   |   |      |     
|Outstanding  December 31, 2000 |           |           | 2,884,473 |                |   |   | 4.53 |     
|                                | Granted   |           |           | 1,143,844      |   |   |      | 7.91 | 
|                                | Exercised |           |           | (812,030       | ) |   |      | 1.98 | 
|                                | Forfeited |           |           | (227,417       | ) |   |      | 7.60 | 
|                                |           |           |           |                |   |   |      |     
|Outstanding  December 31, 2001 |           |           | 2,988,870 |                |   |   | 6.25 |     
|                                |           |           |           |                |   |   |      |     

The following table summarizes information about
stock options outstanding and exercisable at December 31,
2001:

|                        |  |             |           |             |  |               |       |           |  |           |     |  |  |  |           |  |  |   |       | 
|----------------------- |  | ----------- | --------- | ----------- |  | ------------- | ----- | --------- |  | --------- | --- |  |  |  | --------- |  |  | - | ----- | 
|                        |  |             |           |            
|                        |  | Outstanding |           | Exercisable
|                        |  |             |           |            
|                        |  |             |           | Weighted-   |  |              
|                        |  |             |           | Weighted-   |  | average       |       |           |  | Weighted-
|                        |  |             |           | average     |  | remaining     |       |           |  | average  
|                        |  | Number of   |           | exercise    |  | contractual   |       | Number of |  | exercise 
|Range of exercise price |  | shares      |           | price       |  | life in years |       | shares    |  | price    
|                        |  |             |           |             |  |               |       |           |  |          
|$0.12 to 2.19           |  |             | 1,011,120 |             |  | $             | 1.85  |           |  |           | 2.7 |  |  |  | 996,108   |  |  | $ | 1.84  | 
|6.15 to 8.63            |  |             | 1,552,504 |             |  |               | 8.02  |           |  |           | 8.9 |  |  |  | 129,658   |  |  |   | 8.29  | 
|9.75 to 12.13           |  |             | 425,246   |             |  |               | 10.28 |           |  |           | 7.7 |  |  |  | 206,713   |  |  |   | 10.27 | 
|                        |  |             |           |             |  |               |       |           |  |           |     |  |  |  |           |  |  |   |       | 
|                        |  |             | 2,988,870 |             |  |               | 6.25  |           |  |           | 6.6 |  |  |  | 1,332,479 |  |  |   | 3.77  | 
|                        |  |             |           |             |  |               |       |           |  |           |     |  |  |  |           |  |  |   |       | 

As of December 31, 2000 and 1999, 1,932,640
and 2,732,998 options were exercisable, respectively, under the
1993 and 1999 Plans. As of December 31, 2001, there were
1,293,598 shares of common stock available for grant under the
1999 and Director Plan.

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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Fair
Value

Compensation expense has been recognized for
OneSources stock option plans under APB Opinion
No. 25. Had compensation cost been determined based on the
fair value of the options at the grant date consistent with the
provisions of SFAS No. 123, OneSources net income
(loss) and earnings (loss) per share on a pro forma
basis would be as follows:

|                                  |             |                         |   |       |  |      |   |       |   |  |   |        |  
|--------------------------------- | ----------- | ----------------------- | - | ----- |  | ---- | - | ----- | - |  | - | ------ | -
|                                  |             |                        
|                                  |             | Year ended December 31,
|                                  |             |                        
|                                  |             | 2001                    |   | 2000  |  | 1999
|                                  |             |                         |   |       |  |     
|Net income (loss) (in thousands): |             |                         |   |       |  |      |   |       |   |  |   |       
|                                  | As reported |                         | $ | 4,656 |  |      | $ | 858   |   |  | $ | (4,447 | )
|                                  | Pro forma   |                         |   | 2,974 |  |      |   | (214  | ) |  |   | (4,779 | )
|Basic earnings per share:         |             |                         |   |       |  |      |   |       |   |  |   |       
|                                  | As reported |                         |   | 0.37  |  |      |   | 0.07  |   |  |   | (0.50  | )
|                                  | Pro forma   |                         |   | 0.24  |  |      |   | (0.02 | ) |  |   | (0.54  | )
|Diluted earnings per share:       |             |                         |   |       |  |      |   |       |   |  |   |       
|                                  | As reported |                         |   | 0.34  |  |      |   | 0.06  |   |  |   | (0.50  | )
|                                  | Pro forma   |                         |   | 0.22  |  |      |   | (0.02 | ) |  |   | (0.54  | )

Because options vest over several years and
additional option grants are expected to be made in future
years, results of operations for future years may be materially
different if the provisions of SFAS No. 123 are applied.

The fair value of each option grant is estimated
on the date of grant using the Black-Scholes option pricing
model with the following weighted-average assumptions:

|                             |                                                |                         |       |      |  |      |       |      |  |  |       |      | 
|---------------------------- | ---------------------------------------------- | ----------------------- | ----- | ---- |  | ---- | ----- | ---- |  |  | ----- | ---- | 
|                             |                                                |                        
|                             |                                                | Year ended December 31,
|                             |                                                |                        
|Assumptions:                 |                                                | 2001                    |       | 2000 |  | 1999
|                             |                                                |                         |       |      |  |     
|Expected option term (years) |                                                |                         | 5.0   |      |  |      | 5.0   |      |  |  | 5.0   |     
|Risk-free interest rate(%)   |                                                |                         | 4.86  |      |  |      | 6.45  |      |  |  | 5.60  |     
|Expected volatility(%)       |                                                |                         | 59.00 |      |  |      | 50.00 |      |  |  | 18.78 |     
|Dividend yield(%)            |                                                |                         |      |      |  |      |      |      |  |  |      |     
|Fair value:                  |                                                |                         |       |      |  |      |       |      |  |  |       |     
|                             | Weighted-average fair value of options granted |                         | $     | 4.36 |  |      | $     | 4.32 |  |  | $     | 3.81 | 

The fair value of shares issued under the
Purchase Plan is estimated on the date of issue using the
Black-Scholes option pricing model with the following
weighted-average assumptions:

|                           |                                                                                |                         |       |      |  |      |       |      |  |  |   |   | 
|-------------------------- | ------------------------------------------------------------------------------ | ----------------------- | ----- | ---- |  | ---- | ----- | ---- |  |  | - | - | 
|                           |                                                                                |                        
|                           |                                                                                | Year ended December 31,
|                           |                                                                                |                        
|Assumptions:               |                                                                                | 2001                    |       | 2000 |  | 1999
|                           |                                                                                |                         |       |      |  |     
|Expected term (years)      |                                                                                |                         | 0.54  |      |  |      | 0.57  |      |  |  |  |  
|Risk-free interest rate(%) |                                                                                |                         | 5.05  |      |  |      | 5.41  |      |  |  |  |  
|Expected volatility(%)     |                                                                                |                         | 59.00 |      |  |      | 50.00 |      |  |  |  |  
|Dividend yield(%)          |                                                                                |                         |      |      |  |      |      |      |  |  |  |  
|Fair value:                |                                                                                |                         |       |      |  |      |       |      |  |  |   |  
|                           | Weighted-average fair value of common stock
	purchased under the Purchase Plan |                         | $     | 2.90 |  |      | $     | 3.02 |  |  | $ |  | 

Compensation
Expense

During 1998, 203,093 stock options were granted
with an exercise price of $2.19 per share and 1,832 stock
options were granted with an exercise price of $1.37 per share;
these exercise prices were below the estimated fair market value
of the common stock at the date of grant. Unearned compensation
of $45,000 was recorded, in accordance with APB Opinion
No. 25, and will be amortized over the related vesting
period. During 1999, 40,700 stock options were granted with an
exercise price of $2.19 per share and 30,525 stock options were
granted with an exercise price of $5.90 per share; these
exercise prices were below the estimated fair market value of
the common stock at the date of grant. Unearned compensation of
$438,000, less $92,000

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ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

subsequently forfeited by a terminated employee,
was recorded in accordance with APB No. 25 and will be
amortized over the related vesting period of four years. Related
compensation expense of $97,000, $97,000, and $114,000 was
recorded during the years ended December 31, 2001, 2000,
and 1999, respectively.

Options issued during 2001 and 2000 were granted
at the fair market value of the common stock at the grant date.

10.     Restructuring

In July and November 2001, OneSource initiated
cost reduction programs that included in total an 11% reduction
in its overall workforce and the consolidation of certain
functions. OneSource recorded restructuring charges of $374,000
and $286,000 associated with the workforce reduction and
consolidation in the third and fourth quarters of 2001,
respectively. As of December 31, 2001, $136,000 remained
unpaid and will be paid out by mid-2002.

11.     Income
Taxes

Components of the income (loss) before
income taxes and of the current and deferred provision for
income taxes are as follows:

|                                     |          |                         |       |       |  |      |     |        |   |   |        |        |  
|------------------------------------ | -------- | ----------------------- | ----- | ----- |  | ---- | --- | ------ | - | - | ------ | ------ | -
|                                     |          |                        
|                                     |          | Year ended December 31,
|                                     |          |                        
|                                     |          | 2001                    |       | 2000  |  | 1999
|                                     |          |                         |       |       |  |     
|                                     |          |                        
|                                     |          | (in thousands)         
|Income (loss) before income taxes:   |          |                         |       |       |  |      |     |        |   |   |        |       
|                                     | Domestic |                         | $     | 4,682 |  |      | $   | 2,788  |   |   | $      | (3,832 | )
|                                     | Foreign  |                         |       | 1,856 |  |      |     | (1,864 | ) |   |        | (482   | )
|                                     |          |                         |       |       |  |      |     |        |   |   |        |       
|                                     |          | $                       | 6,538 |       |  | $    | 924 |        |   | $ | (4,314 | )     
|                                     |          |                         |       |       |  |      |     |        |   |   |        |       
|Current provision for income taxes:  |          |                         |       |       |  |      |     |        |   |   |        |       
|                                     | Federal  |                         | $     | 401   |  |      | $   |       |   |   | $      |       |  
|                                     | State    |                         |       | 427   |  |      |     | 66     |   |   |        | 133    |  
|                                     | Foreign  |                         |       | 130   |  |      |     |       |   |   |        |       |  
|                                     |          |                         |       |       |  |      |     |        |   |   |        |       
|                                     |          |                         | 958   |       |  |      | 66  |        |   |   | 133    |       
|                                     |          |                         |       |       |  |      |     |        |   |   |        |       
|Deferred provision for income taxes: |          |                         |       |       |  |      |     |        |   |   |        |       
|                                     | Federal  |                         |       | 563   |  |      |     |       |   |   |        |       |  
|                                     | State    |                         |       | 116   |  |      |     |       |   |   |        |       |  
|                                     | Foreign  |                         |       | 245   |  |      |     |       |   |   |        |       |  
|                                     |          |                         |       |       |  |      |     |        |   |   |        |       
|                                     |          |                         | 924   |       |  |      |    |        |   |   |       |       
|                                     |          |                         |       |       |  |      |     |        |   |   |        |       
|Total provision for income taxes     |          | $                       | 1,882 |       |  | $    | 66  |        |   | $ | 133    |       
|                                     |          |                         |       |       |  |      |     |        |   |   |        |       

OneSource had no deferred provision for income
taxes in each of the years ended December 31, 2000 or 1999
due to the offsetting effects of the valuation allowance on its
net deferred tax assets. Provision has not been made for the
United States or additional foreign taxes on undistributed
earnings of foreign subsidiaries as those earnings have been
permanently reinvested. Such taxes, if any, are not expected to
be significant.

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ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Income taxes computed using the federal statutory
income tax rate differ from OneSources effective tax rate
primarily due to the following:

|                                                               |  |                         |        |      |  |      |      |   |  |   |        |  
|-------------------------------------------------------------- |  | ----------------------- | ------ | ---- |  | ---- | ---- | - |  | - | ------ | -
|                                                               |  |                        
|                                                               |  | Year ended December 31,
|                                                               |  |                        
|                                                               |  | 2001                    |        | 2000 |  | 1999
|                                                               |  |                         |        |      |  |     
|                                                               |  |                        
|                                                               |  | (in thousands)         
|Income tax expense (benefit) at US federal
	statutory tax rate |  | $                       | 2,223  |      |  | $    | 314  |   |  | $ | (1,467 | )
|State income taxes, net of federal tax effect                  |  |                         | 398    |      |  |      | 44   |   |  |   | (156   | )
|Permanent items                                                |  |                         | 362    |      |  |      | 389  |   |  |   | 128    |  
|Other                                                          |  |                         | 127    |      |  |      | 12   |   |  |   | 36     |  
|Change in deferred tax asset valuation allowance               |  |                         | (1,228 | )    |  |      | (693 | ) |  |   | 1,592  |  
|                                                               |  |                         |        |      |  |      |      |   |  |   |        |  
|Provision for income taxes                                     |  | $                       | 1,882  |      |  | $    | 66   |   |  | $ | 133    |  
|                                                               |  |                         |        |      |  |      |      |   |  |   |        |  

Components of OneSources deferred tax
assets and liabilities are as follows:

|                             |                                        |                                |      |        |       |   |   |        |       | 
|---------------------------- | -------------------------------------- | ------------------------------ | ---- | ------ | ----- | - | - | ------ | ----- | 
|                             |                                        |                               
|                             |                                        | December 31,                  
|                             |                                        |                               
|                             |                                        | 2001                           |      | 2000  
|                             |                                        |                                |      |       
|                             |                                        |                               
|                             |                                        | (in thousands)                
|Deferred tax assets:         |                                        |                                |      |        |       |   |   |       
|                             | Net operating loss carryforwards       |                                | $    | 3,828  |       |   | $ | 5,725  |      
|                             | Depreciation                           |                                |      | 972    |       |   |   | 754    |      
|                             | Accrued expenses                       |                                |      | 325    |       |   |   | 513    |      
|                             | Other                                  |                                |      | 145    |       |   |   | 308    |      
|                             |                                        |                                |      |        |       |   |   |       
|                             |                                        | Gross deferred tax asset       |      |        | 5,270 |   |   |        | 7,300 | 
|                             | Less: valuation allowance              |                                |      | (3,530 | )     |   |   | (5,023 | )    
|                             |                                        |                                |      |        |       |   |   |       
|                             |                                        | Total deferred tax assets      |      |        | 1,740 |   |   |        | 2,277 | 
|                             |                                        |                                |      |        |       |   |   |       
|Deferred tax liabilities:    |                                        |                                |      |        |       |   |   |       
|                             | Prepaid expenses                       |                                |      | 550    |       |   |   | 866    |      
|                             | Other intangible assets                |                                |      | 674    |       |   |   | 863    |      
|                             | Capitalized software development costs |                                |      | 377    |       |   |   | 129    |      
|                             | Tax operating leases                   |                                |      | 384    |       |   |   | 347    |      
|                             | Amortization of debt discount          |                                |      |       |       |   |   | 72     |      
|                             |                                        |                                |      |        |       |   |   |       
|                             |                                        | Total deferred tax liabilities |      |        | 1,985 |   |   |        | 2,277 | 
|                             |                                        |                                |      |        |       |   |   |       
|Net deferred tax liabilities |                                        | $                              | (245 | )      |       | $ |  |       
|                             |                                        |                                |      |        |       |   |   |       

Realization of OneSources net deferred tax
assets is contingent upon the generation of future taxable
income. Due to the uncertainty of realization of these tax
benefits, OneSource has provided a valuation allowance for the
full amount of its net deferred tax assets.

As of December 31, 2001, OneSource has
combined federal and state net operating loss carryforwards of
approximately $10.0 million that begin to expire in 2019
and 2004, respectively. Under the provisions of the Internal
Revenue Code, if certain substantial changes in OneSources
ownership should occur, the amount of net operating loss
carryforwards which could be utilized annually to offset future
taxable income and income tax liability may be limited. The
amount of any annual limitation is determined based upon
OneSources value prior to an ownership change.

A portion of the net operating loss carryforwards
totaling approximately $7.4 million relates to deductions
for the exercise of non-qualified stock options and will be
credited to additional paid-in capital upon realization.
Approximately $533,000 of the valuation allowance relates to
deferred tax assets acquired from Corporate Technology
Information Services, Inc., which when realized will be applied
against goodwill.

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ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

12.     Sale of
Product Lines

In May 1998, OneSource sold its CD-Insurance
division for $11.0 million in cash and entered a software
license agreement for $4.0 million to be received in equal
quarterly installments for two years commencing January 1,
1999 and ending on December 31, 2000. In connection with
the sale, OneSource also entered into a non-compete agreement
for five years. Payments pertaining to the software license
agreement were recognized in other income as support services
were performed and payments were made in accordance with the
agreement. OneSource recorded $2.0 million of other income
related to the software license agreement for both years ended
December 31, 2000 and 1999.

13.     Employee
Benefit Plans

On the first day of the month following the date
of hire, OneSource employees are eligible to participate in a
tax deferred savings plan (the Savings Plan) under
Section 401(k) of the Internal Revenue Code. OneSource
matches 50% (25% for the years 2000 and prior) of the first 6%
contributed by the employee, and the employee becomes fully
vested in OneSources matching contribution after three
years of service. OneSources contributions to the Savings
Plan totaled $294,000, $139,000, and $133,000 for the years
ended December 31, 2001, 2000, and 1999, respectively.

14.     Related Party
Transactions

At December 31, 2001 and 2000, OneSource had
trade accounts receivable of $525,000 and $526,000,
respectively, due from one stockholder. OneSource recognized
revenues of $766,000, $563,000, and $558,000 in the years ended
December 31, 2001, 2000, and 1999, respectively, from two
stockholders.

Management fees paid to a stockholder and an
affiliate of another stockholder for the year ended
December 31, 1999 were $68,000, and are included in general
and administrative expenses.

In addition, OneSource paid a termination fee of
$500,000 to both a stockholder and an affiliate of another
stockholder in conjunction with the initial public offering in
1999.

15.     Commitments

Leases

OneSource leases facilities and certain equipment
under various noncancellable operating lease agreements. Total
rent expense under such leases was $1.5 million,
$1.5 million, and $1.6 million for the years ended
December 31, 2001, 2000, and 1999, respectively. Future minimum
lease commitments under all noncancellable operating leases at
December 31, 2001 are as follows:

|                             |  |                |       | 
|---------------------------- |  | -------------- | ----- | 
|                             |  | Operating     
|                             |  | Leases        
|                             |  |               
|                             |  | (in thousands)
|2002                         |  | $              | 1,096 | 
|2003                         |  |                | 952   | 
|2004                         |  |                | 622   | 
|2005                         |  |                | 202   | 
|2006                         |  |                | 155   | 
|                             |  |                |       | 
|Total minimum lease payments |  | $              | 3,027 | 
|                             |  |                |       | 

Royalties

OneSource enters into royalty contracts with
content providers, which are generally for a term of at least
one year and renew for the same period if not cancelled or
terminated with advance notice. Under these arrangements,
royalties are generally paid on a quarterly basis to content
providers. Royalty expense for the

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ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

years ended December 31, 2001, 2000, and
1999 was $11.8 million, $11.5 million, and
$11.3 million, respectively. Future minimum royalty payment
obligations at December 31, 2001 are as follows:

|                               |  |                |       | 
|------------------------------ |  | -------------- | ----- | 
|                               |  | Royalty       
|                               |  | Minimums      
|                               |  |               
|                               |  | (in thousands)
|2002                           |  | $              | 5,362 | 
|2003                           |  |                | 2,216 | 
|2004                           |  |                | 55    | 
|                               |  |                |       | 
|Total minimum royalty payments |  | $              | 7,633 | 
|                               |  |                |       | 

Restricted
Time Deposits

In connection with several facility leases,
OneSource is required to maintain, on behalf of the landlord,
irrevocable letters of credit with a bank in the total amount of
$603,000 over the term of the leases. In addition, OneSource is
required to maintain certificates of deposit in equal amounts as
security for the letters of credit, over the term of the leases.

16.     Geographic
Information

Revenues were distributed geographically as
follows:

|               |  |                         |        |      |  |      |        |  |  |   |        | 
|-------------- |  | ----------------------- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|               |  |                        
|               |  | Year ended December 31,
|               |  |                        
|               |  | 2001                    |        | 2000 |  | 1999
|               |  |                         |        |      |  |     
|               |  |                        
|               |  | (in thousands)         
|United States  |  | $                       | 44,086 |      |  | $    | 41,080 |  |  | $ | 27,543 | 
|United Kingdom |  |                         | 14,931 |      |  |      | 10,809 |  |  |   | 8,005  | 
|               |  |                         |        |      |  |      |        |  |  |   |        | 
|               |  | $                       | 59,017 |      |  | $    | 51,889 |  |  | $ | 35,548 | 
|               |  |                         |        |      |  |      |        |  |  |   |        | 

Substantially all of OneSources
identifiable assets are located in the United States.

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##### Table of Contents






REPORT OF INDEPENDENT ACCOUNTANTS ON

FINANCIAL STATEMENT SCHEDULE


To the Board of Directors

of OneSource Information Services, Inc.:


Our audits of the consolidated financial
statements referred to in our report dated February 1, 2002
listed in the index appearing under Item 14(a)(1) on
page 29 also included an audit of the financial statement
schedule listed in Item 14(a)(2) on page 29 of this
Annual Report on Form 10-K. In our opinion, the financial
statement schedule presents fairly, in all material respects,
the information set forth therein when read in conjunction with
the related consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

February 1, 2002


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##### Table of Contents






ONESOURCE INFORMATION SERVICES, INC.

(In thousands)





SCHEDULE II. VALUATION AND QUALIFYING
ACCOUNTS

|                             |                                                        |                                        |  |            |       |               |  |            |       |  |  |   |       |  |  |   |       | 
|---------------------------- | ------------------------------------------------------ | -------------------------------------- |  | ---------- | ----- | ------------- |  | ---------- | ----- |  |  | - | ----- |  |  | - | ----- | 
|                             |                                                        | Balance at                             |  |            |       |               |  | Balance at
|                             |                                                        | Beginning of                           |  | Charged to |       |               |  | End of    
|Description                  |                                                        | Period                                 |  | Operations |       | Deductions(1) |  | Period    
|                             |                                                        |                                        |  |            |       |               |  |           
|Year ended December 31, 1999 |                                                        |                                        |  |            |       |               |  |            |       |  |  |   |       |  |  |  
|                             | Reserves and allowances deducted from asset
	accounts: |                                        |  |            |       |               |  |            |       |  |  |   |       |  |  |   |      
|                             |                                                        | Allowance for doubtful accounts        |  | $          | 300   |               |  | $          | 96    |  |  | $ | 48    |  |  | $ | 348   | 
|                             |                                                        | Deferred tax asset valuation allowance |  | $          | 1,768 |               |  | $          | 2,090 |  |  | $ |      |  |  | $ | 3,858 | 
|Year ended December 31, 2000 |                                                        |                                        |  |            |       |               |  |            |       |  |  |   |       |  |  |  
|                             | Reserves and allowances deducted from asset
	accounts: |                                        |  |            |       |               |  |            |       |  |  |   |       |  |  |   |      
|                             |                                                        | Allowance for doubtful accounts        |  | $          | 348   |               |  | $          | 339   |  |  | $ | 15    |  |  | $ | 672   | 
|                             |                                                        | Deferred tax asset valuation allowance |  | $          | 3,858 |               |  | $          | 1,165 |  |  | $ |      |  |  | $ | 5,023 | 
|Year ended December 31, 2001 |                                                        |                                        |  |            |       |               |  |            |       |  |  |   |       |  |  |  
|                             | Reserves and allowances deducted from asset
	accounts: |                                        |  |            |       |               |  |            |       |  |  |   |       |  |  |   |      
|                             |                                                        | Allowance for doubtful accounts        |  | $          | 672   |               |  | $          | 238   |  |  | $ | 140   |  |  | $ | 770   | 
|                             |                                                        | Deferred tax asset valuation allowance |  | $          | 5,023 |               |  | $          |      |  |  | $ | 1,493 |  |  | $ | 3,530 | 






|    |                                                  
|--- | -------------------------------------------------
|(1) | Doubtful accounts written off, net of recoveries.

S-2