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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,
    2002                                                 
|  
|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

Indicate by check mark whether the Registrant is
an accelerated filer (as defined in Rule 12b-2 of the
Securities Exchange Act of
1934).    Yes o         No þ

The aggregate market value of the voting and
non-voting common equity held by non-affiliates computed by
reference to the price at which the common equity was last sold,
or the average bid and asked price of such common equity, as of
the most recently completed second fiscal quarter (June 30,
2002) was approximately $50 million. 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 20, 2003, the registrant had
11,679,012 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, 2002. 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 I                                                           
|                                                                  | Item 1.Business                                                                              
|                                                                  | Item 2. Properties                                                                           
|                                                                  | Item 3. Legal Proceedings                                                                    
|                                                                  | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II                                                          
|                                                                  | Item 5. Market for Registrants Common Equity and Related Stockholder Matters                
|                                                                  | Item 6. Selected Consolidated Financial and Operating Data                                   
|                                                                  | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                                  | Item 7A. Quantitative and Qualitative Disclosure About Market Risk                           
|                                                                  | Item 8. Financial Statements and Supplementary Data                                          
|                                                                  | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III                                                         
|                                                                  | Item 10. Directors and Executive Officers of the Registrant                                  
|                                                                  | Item 11. Executive Compensation                                                              
|                                                                  | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|                                                                  | Item 13. Certain Relationships and Related Transactions                                      
|                                                                  | Item 14. Controls and Procedures                                                             
|                                                                  | Item 15. Principal Accountant Fees and Services                                              
|PART IV                                                          
|                                                                  | Item 16.Exhibits, Financial Statement Schedules, and Reports on Form 8-K                     
|SIGNATURES                                                       
|CERTIFICATIONS                                                   
|CONSOLIDATED BALANCE SHEET                                       
|CONSOLIDATED STATEMENT OF INCOME                                 
|CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY        
|CONSOLIDATED STATEMENT OF CASH FLOWS                             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                       
|REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE
|LOAN & SECURITY AGREEMENT                                        
|CONSENT OF PRICEWATERHOUSECOOPERS LLP                            
|CERTIFICATION OF THE CEO                                         
|CERTIFICATION OF THE CFO                                         



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TABLE OF CONTENTS

|               |  |                                                                                           |    |      |    | 
|-------------- |  | ----------------------------------------------------------------------------------------- | -- | ---- | -- | 
|               |  |                                                                                           |    | Page
|               |  |                                                                                           |    |     
|PART I        
|Item 1.        |  | Business                                                                                  |    |      | 2  | 
|Item 2.        |  | Properties                                                                                |    |      | 12 | 
|Item 3.        |  | Legal Proceedings                                                                         |    |      | 12 | 
|Item 4.        |  | Submission of Matters to a Vote of Security
    Holders                                   |    |      | 12 | 
|PART II       
|Item 5.        |  | Market for Registrants Common Equity and
    Related Stockholder Matters                 |    |      | 13 | 
|Item 6.        |  | Selected Consolidated Financial and Operating Data                                        |    |      | 14 | 
|Item 7.        |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations |    |      | 15 | 
|Item 7A.       |  | Quantitative and Qualitative Disclosure About
    Market Risk                             |    |      | 36 | 
|Item 8.        |  | Financial Statements and Supplementary Data                                               |    |      | 36 | 
|Item 9.        |  | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure  |    |      | 37 | 
|PART III      
|Item 10.       |  | Directors and Executive Officers of the Registrant                                        |    |      | 37 | 
|Item 11.       |  | Executive Compensation                                                                    |    |      | 37 | 
|Item 12.       |  | Security Ownership of Certain Beneficial Owners
    and Management                        |    |      | 37 | 
|Item 13.       |  | Certain Relationships and Related Transactions                                            |    |      | 37 | 
|Item 14.       |  | Controls and Procedures                                                                   |    |      | 37 | 
|Item 15.       |  | Principal Accountant Fees and Services                                                    |    |      | 37 | 
|PART IV       
|Item 16.       |  | Exhibits, Financial Statement Schedules, and
    Reports on Form 8-K                      |    |      | 38 | 
|Signatures     |  |                                                                                           | 40 |     
|Certifications |  |                                                                                           | 42 |     

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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.

OneSources Internet address is
www.onesource.com, and OneSource maintains a website at
that address. OneSource makes available on or through its
website, without charge, its annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on
Form 8-K, and amendments to those reports on the day such
material is electronically filed with the United States
Securities and Exchange Commission or if not reasonably
practical on that day, on the first business day following
electronic filing with the United States Securities and Exchange
Commission.

General

OneSource provides primarily Web-based business
and financial information products and services 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 1.7 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 a separate Web-based product, as part of
CD Roms, and through third party distributors.

OneSource uses its proprietary classification
system, which is referred to as the Global Business
Taxonomy system, to associate, link, and integrate over
2,500 disparate sources of information on public and private
companies worldwide that are made available from more than 30
information providers and the OneSource CorpTech high-technology
database. Each information source provides its database to
OneSource with identifiers for companies unique to that source.
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 software development kit. The Applink
software development kit lets OneSource customers access
Business Browser content in HTML and XML formats via 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 with third party software platforms. OneSource
believes that the flexibility of its customers to access, use,
and integrate information from the OneSource products with 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

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services industries with at least 500 employees
and $250 million or more in sales, and that employ large
direct sales forces. Representative customers include
Deloitte & Touche LLP, Hewlett Packard Company, Oracle
Corporation, Bank One Corporation, 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, 2002, 812 organizations
subscribed to the Business Browser product line, compared to 817
as of December 31, 2001. On average, customers for Business
Browser products as of December 31, 2002 had an annualized
contract value of $69,058 per customer, compared to an average
annualized contract value of $68,700 per customer as of
December 31, 2001. As of December 31, 2002,
51 organizations subscribed to the AppLink software
development kit. Customers for the AppLink software development
kit as of December 31, 2002 generated, on average,
approximately $345,000 each in annualized contract value.

The aggregate annualized contract value of
Business Browser product contracts was $56.1 million as of
December 31, 2002 and December 31, 2001. Of this
$56.1 million, $42.6 million was attributable to those
customers that were under contract as of both December 31,
2001 and 2002. The renewal rate for subscribers of the Business
Browser product line as of December 31, 2002 was 76%
calculated on a dollar basis, whereas the renewal rate for those
subscribers to the AppLink software development kit as of
December 31, 2002 was 82% 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 does not represent
seasonality to any significant extent. During the fourth quarter
of fiscal years 2002, 2001, and 2000, OneSource invoiced 34%,
31%, and 38% 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 then 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.

Industry Trends

During the past several years, the direct access
to, and the purchasing decisions for, business information
products have increasingly migrated from centralized information
specialists to core operating functions in corporations. This
has led to the availability of more information products
throughout corporations and has increased direct access to these
products by end-users.

The spread of information products throughout
corporations has created opportunities for companies with
knowledge of business information and the requisite skills and
experience in integrating such information to assist customers
in better leveraging their internal and external information
sources. It has also empowered end-users to require that
information products are designed and developed to work with
their existing applications and business processes, and that the
information itself is the most relevant to perform their
functions.

This underlying trend is directly affected by the
substantial investments that corporations have made in various
software applications such as customer relationship management,
enterprise information portals, and

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even desktop applications such as word processors
and spreadsheets. Business information solutions now must be
designed to consider these applications of choice as the
prerequisite user work modes and environments. OneSource
believes that the companies that solve these particular problems
of delivering products and services that operate effectively
with these third party applications and that satisfy the data
requirements of end-users functions will ultimately
succeed and be the leaders in the business information industry.


Business Strategy

OneSources goal is to be the leading
provider of business information solutions to Global 5000
companies. It plans to achieve that goal through a number of
core business strategies as follows:



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1) | Evolve and develop products and services that
    respond to the market trend to support the functions,
    applications, and business processes of end-users.OneSources product strategy is
    to provide end-users with the information they need, when they
    need it, and in the applications they use. OneSource believes
    that the productivity and efficiency of workers such as sales
    people, loan officers, and management consultants are enhanced
    with additional time saved or revenue earned from the use of
    effective, easy-to-use, and customized business information
    products and services. OneSources product strategy will be
    driven by two primary themes:



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. | Continue to enhance Business Browser
    products Today Business
    Browser products comprise the majority of Web-based revenues.
    OneSource will continue to invest in and serve Business Browser
    customers with new features and functions, and information
    content. This will include new features that better serve the
    functions and industries of end-users as well as expanded
    geographic and field-specific coverage of the information
    content that OneSource delivers.                                                                                                                                                                                                                                     
|
| | b. | Introduce new and evolved products and
    services At the same time
    while serving Business Browser customers, OneSource will
    introduce and evolve its products and services that address the
    needs of customers who seek solutions that are flexible,
    customizable, and integrate with the software applications,
    business processes, and tasks of end-users. Recent improvements
    to the AppLink software development kit and the provision of
    custom design and development services are initial examples of
    OneSources efforts to introduce new and evolved products
    and services. OneSource expects new products and services to
    contribute an increasing portion of future revenues and growth.
|
| |    | These new products and services will leverage
    investments that OneSource has made and will make towards its
    Business Browser products and platforms. Specifically, new
    products and services will share the OneSource website, the
    computer hardware and software that hosts OneSource products,
    the underlying technology platform on which the products are
    built, third party information content, the CorpTech
    high-technology database, and OneSources sales force and
    development staff.                                                                                                                                                                                                               



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2) | Have the right information content in support
    of the roles and requirements of end-users.OneSource spends considerable time in
    acquiring, integrating, and managing its content sources and
    ensuring that critical fields of data such as executive and
    financial data are available to serve the specific roles and
    tasks of end-users. OneSource considers information quality to
    be a priority, and to that end OneSource strives to obtain
    accurate, complete, and timely information and to influence the
    information industry in enhancing its overall data quality.
|
| | 3) | Continue to leverage its core competency in
    integrating company-related business information.The OneSource Global Business Taxonomy
    system allows OneSource to easily and effectively classify
    business information and tie together internal and external
    sources of business information. OneSource plans to continue to
    extend the capabilities of the Global Business Taxonomy system.                                                                                                                                                                                            
|
| | 4) | Selectively expand geographically.In 2002, OneSource expanded its
    presence to the Pacific Rim region to supplement its core
    markets in North America and Europe. OneSource intends to
    continue to evaluate geographies to extend its products and
    services and sales and marketing reach.                                                                                                                                                                                                                                                                                                 

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| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5) | Align and train sales, marketing, and customer
    support teams to optimally serve OneSources primary target
    market.In 2002 and continuing
    forward, OneSource has taken and will take a number of steps to
    enhance how its sales, marketing, and support teams serve Global
    5000 customers. First, OneSources selling approach
    seeks to better understand customers business and
    information needs and market both products and services that
    solve more of these needs. This builds upon OneSources
    past selling approach that was primarily based on generalized
    product use. Secondly, OneSources sales and marketing
    efforts focus on its primary target market. This focus is meant
    to acquire and build domain specific skills and knowledge in
    terms of the applications, business processes, and functions of
    these customers and the industries in which they operate.
    Thirdly, this past year OneSource created a professional
    services consulting team. This team, which provides fee-based
    services, will promote and support the integration of
    OneSources Web-based products with customers
    systems, data, and applications, and will assist in the design
    and development of custom applications.

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 30 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
Global Business Taxonomy system to sort, categorize, link, and
integrate information on over 1.7 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 software development kit 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.

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 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 four editions. Global
Business Browser, US Edition is an integrated information

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resource that delivers integrated information on
over 450,000 North American and global companies. Global
Business Browser, European Edition includes both European and
global content with over 488,000 companies profiled. Global
Business Browser, UK edition is an integrated resource including
both United Kingdom and global content with more than
500,000 companies profiled. Global Business Browser Asia
Pacific is an integrated resource including both Asia Pacific
and global content with 348,000 companies profiled.


US BUSINESS BROWSER. US Business Browser is
focused specifically on public and private companies in the
United States and Canada. It contains a subset of business,
financial, and industry information from Global Business
Browser, US Edition. It covers approximately 352,000 public
and private companies in the United States and Canada. OneSource
makes available in-depth content on Canadian companies for an
additional subscription fee. OneSource also makes available
in-depth content on small and mid-market United States and
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 United Kingdom companies. It contains a
subset of business, financial, and industry information from
Global Business Browser, European Edition. 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 United Kingdom companies.

UK BUSINESS BROWSER. UK Business Browser is an
integrated source of information on up to 400,000 public
and private companies in the United Kingdom. It contains a
subset of business, financial, and industry information from
Global Business Browser, UK Edition. UK Business Browser is
available in two configurations, a 100,000 companies
edition and a 400,000 companies edition. OneSource makes
available in-depth content on United Kingdom quoted companies
for an additional subscription fee. OneSource also makes
available in-depth content on United Kingdom public sector and
partnership entities for an additional subscription fee.

US COMPANY BROWSER. US Company Browser is focused
specifically on public and private companies in the United
States 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
United States and Canada. OneSource also makes available
in-depth content on small and mid-market United States and
Canadian companies for an additional subscription fee.

Revenues contributed by the Business Browser
product line during each of the last three fiscal years were as
follows: $55.7 million for the year ended December 31,
2002; $56.3 million for the year ended December 31,
2001; and $47.3 million for the year ended
December 31, 2000. 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; and                                                                                         
|
| |  | 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 SOFTWARE DEVELOPMENT KIT. The AppLink
software development kit 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, in HTML and XML formats 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. In 2002, OneSource introduced
on-line access to the CorpTech high-technology database through
a website located at www.corptech.com. This website
offers a few options for customers including downloadable report
lists that are based on such criteria as geography and companies
of interest in a particular industry, company profile reports on
a pay-per-view basis, and a subscription-based offering in which
the fee varies based on the functionality selected and whether
the licensee is a library or other entity type.

Services

OneSource provides fee-based services to
customers that seek to integrate Business Browser content with
their internal systems, data, and applications and enhance
functionality by using the Global Business Taxonomy system to
organize and link disparate internal data sources and connect
them to Business Browser content.

OneSource also offers customers fee-based expert
services to assist them in designing and building custom
information applications and solving their business and
financial information needs such as linking together internal
and external information databases.

7



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Product and Platform Development

OneSource employs two teams that contribute to
the commercialization and research and development of OneSource
products and their underlying technology platforms and the
licensing and management of the data in the OneSource products
as follows: the Products and Solutions Team and the Content Team.

The Products and Solutions Team (formerly the
Packaged Solutions Team, Embedded Solutions Team, and
Engineering Team) consists of product managers, consultants, and
engineers. Product managers supervise the specification,
maintenance, and enhancement of functionality, user interface,
product workflow, format and look of reports, and information
required for the OneSource products. Consultants provide
fee-based expert services to assist customers in designing and
building custom information applications and solving their
business information needs such as linking together internal and
external information databases. Engineers develop, deploy, and
maintain the functionality, core technologies, and underlying
architecture that support the OneSource product line. They work
closely with product managers to ensure that functionality and
support requirements are understood, prioritized, and developed
according to agreed upon time frames and requirements. They also
research and qualify third party software such as database
engines, operating systems and platforms, and emerging industry
standards such as HTML, XML, and Simple Object Access Protocol.
The Product and Solutions Team seeks to ensure overall product
quality resulting from rigorous process control, development
cost awareness, and adoption of best practices.

The Content Team analyzes and evaluates third
party data sources and acquires the information required for the
OneSource products. This team also includes database engineers
who receive content feeds from information providers and write
database loader code. Additionally, the Content Team maintains
and enhances the proprietary Global Business Taxonomy system and
Business Browser content, provides fee-based services to
customers that seek to integrate Business Browser content with
their internal systems and applications and enhance
functionality by using the Global Business Taxonomy system to
organize and link disparate internal data sources and connect
them to Business Browser content. 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 Global Business Taxonomy system to allow users to perform
searches in OneSource products by the use of commonly used
alternative company names. In total, the Global Business
Taxonomy system contains approximately over 1.7 million
companies; 250 business-focused topics;
1,900 industries and lines of business such as SIC codes;
310 geographic regions, countries, and territories; and
20 executive functions applied to over 6 million
corporate executives.

Operating expenses relating to product and
platform development during each of the last three fiscal years
were as follows: $10.0 million for the year ended
December 31, 2002; $8.4 million for the year ended
December 31, 2001; and $8.8 million for the year ended
December 31, 2000. These expenses were net of capitalized
software development costs associated with the development of
OneSources new products and platforms, which were
$1.9 million for the year ended December 31, 2002,
$0.8 million for the year ended December 31, 2001, and
$0.5 million for the year ended December 31, 2000.
OneSource plans to increase its investment in product and
platform research and development in the future by approximately
$2.0 million, or 20%, net of capitalized software
development costs, for fiscal year 2003 as it intends to invest
further in the tools and technology to address the needs of
Global 5000 customers, its target market. OneSource anticipates
capitalized software development costs to be approximately
$3.0 million to $4.0 million in 2003.

Information and Providers

OneSource Business Browser products integrate and
include a careful selection of financial, company, industry,
executive, and news-related content from over 2,500 sources
provided by more than 30 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 on-line products.

8



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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 on a per user basis 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
to information providers on a quarterly basis.

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,
semi-annual, or 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 generally 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 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 United States and United Kingdom
business units of Dun & Bradstreet, Inc. (a subsidiary
of The Dun & Bradstreet Corporation); The Gale Group (a
Thomson Corporation subsidiary); Thomson Financial, Inc. (a
Thomson Corporation subsidiary); and Market Guide Inc. (a
Multex.com, Inc. subsidiary).

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 its business: the
CorpTech high-technology company database; the Global Business
Taxonomy system; the trade secrets relating to OneSource
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 technology and
information providers typically warrant that the licensed
technology or data do not infringe any trade name, trademark,
copyright, or other proprietary right of any third party, and
state that the technology and information providers agree to
defend, indemnify, and hold OneSource harmless with respect to
any third party claim alleging that the licensed technology or
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 service marks in the United States,
Canada, and the European Union, and has registered copyrights in
the United States. OneSource believes that its intellectual
property does not infringe upon the proprietary rights of third
parties.

Alliances

In 2002, OneSource renewed its alliance with
Siebel Systems, Inc., a supplier of e-business applications
software. 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, and the integration of such information,
with other third party software applications. These applications
generally

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focus on corporate intranets, portals, and
customer relationship management platforms. In addition, the
alliances intend to increase marketing reach and awareness.


Examples of other alliances that OneSource has
formed include those with the following corporations: 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 Microsoft Business Solutions
Corporation (a subsidiary of Microsoft Corporation), a provider
of business management software. 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, 2002, OneSource had 812
corporate customers. In 2002, no one customer contributed more
than 3% of annual revenues, and 338 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 or more in sales, and that
employ large sales forces. As of December 31, 2002,
approximately 69%, or $38.7 million, of total annualized
contract value for OneSource Business Browser products came from
Global 5000 customers. In addition, as of December 31,
2002, approximately 32%, or $18.0 million, of total annualized
contract value for OneSource Business Browser products came from
customers who subscribe to the OneSource AppLink software
development kit.

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
United States and the United Kingdom. OneSource also has formed
alliances to help in the promotion and marketing of its products.

As of December 31, 2002, OneSource incurred
selling and marketing expense in the amount of
$16.5 million, compared to $18.4 million incurred at
the end of fiscal year 2001 and $20.5 million at the end of
fiscal year 2000. OneSource expects that selling and marketing
expense will increase by approximately 8% for fiscal year 2003
as OneSource intends to enhance sales and marketing initiatives
focused on Global 5000 customers, its 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 software development kit, and other technical projects.

OneSource also employs telephone-based customer
support representatives in the United States and in the United
Kingdom. 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 Cable &
Wireless plc, a third party hosting vendor. The hosting
facility is located in Medford, Massachusetts. Cable &
Wireless 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
2003, OneSource intends to activate a second hosting site that
utilizes existing

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equipment, in Santa Clara, California, which will
also be managed by Cable & Wireless, in order to ensure
OneSources on-line products remain 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, excluding scheduled
maintenance.


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 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 Group (a Reed Elsevier Plc
    subsidiary), The Dialog Corporation (a Thomson Corporation
    subsidiary), Factiva (a Dow Jones & Co. and
    Reuters Group PLC joint venture), and Bureau Van Dijk Computer
    Services SA;
|
| |  | providers of company information, such as Thomson
    Financial, Inc. (a Thomson Corporation subsidiary), Market
    Guide Inc. (a Multex.com, Inc. subsidiary), Hemscott
    Group Ltd., and Hoovers, Inc. (a subsidiary of The
    Dun & Bradstreet Corporation);                                    
|
| |  | providers of sales, marketing, and credit
    information, such as Dun & Bradstreet, Inc. (a
    subsidiary of The Dun & Bradstreet Corporation) and
    infoUSA Inc.; and                                                                                                                             
|
| |  | Web retrieval, Web portal companies,
    and other free or low-cost mass market on-line information
    services, such as Yahoo! Inc., AOL-Time Warner, Inc.,
    MarketWatch.com, Inc., 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 business
information services industry are availability of 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; expertise in the design and development of custom
information applications; 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

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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, 2002, OneSource employed
242 employees (including 232 full-time employees and
10 part-time employees), compared to 239 at the end of
fiscal year 2001 (including 232 full-time employees and
7 part-time employees). 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 $15.7 million,
$14.9 million, and $10.8 million from the United
Kingdom business, and $42.0 million, $44.1 million and
$41.1 million from the United States business, for the
years ended December 31, 2002, 2001, and 2000, respectively.

The operations in the United Kingdom are subject
to the usual risks inherent in doing business in countries
outside of the United States, 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 United Kingdom 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. This lease includes an option to renew
the lease at the then current market rental rate for another
five years. OneSource leases additional office space in New
York, New York; San Francisco, California; 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 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.






|        |                                                        
|------- | -------------------------------------------------------
|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, 2002.

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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.

|               |  |      |       |      |  |      |      |     |  |   |       |  |  |   |      | 
|-------------- |  | ---- | ----- | ---- |  | ---- | ---- | --- |  | - | ----- |  |  | - | ---- | 
|               |  |      |       |     
|               |  | 2002 |       | 2001
|               |  |      |       |     
|               |  | High |       | Low  |  | High |      | Low
|               |  |      |       |      |  |      |      |    
|First quarter  |  | $    | 10.36 |      |  | $    | 6.02 |     |  | $ | 10.13 |  |  | $ | 4.88 | 
|Second quarter |  | $    | 8.40  |      |  | $    | 6.45 |     |  | $ | 8.98  |  |  | $ | 5.01 | 
|Third quarter  |  | $    | 6.90  |      |  | $    | 5.42 |     |  | $ | 10.10 |  |  | $ | 7.10 | 
|Fourth quarter |  | $    | 7.67  |      |  | $    | 5.15 |     |  | $ | 9.90  |  |  | $ | 6.82 | 




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 20, 2003 was 67.



|    |                                                        
|--- | -------------------------------------------------------
|(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, were 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

OneSource has not sold any securities in 2002,
2001, and 2000 that were not registered under the Securities Act
of 1933.



|    |                                                                       
|--- | ----------------------------------------------------------------------
|(D) | Securities Authorized for Issuance Under
    Equity Compensation Plans

The information required by this Item with
respect to our equity compensation plans appears in this Annual
Report on Form 10-K in the Notes to Consolidated Financial
Statements under the caption Stock Plans on
page F-15, and is incorporated by reference.

13



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##### Table of Contents








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

The consolidated statements of operations data
provided for the years ended December 31, 2002, 2001 and
2000, and the consolidated balance sheet data as of
December 31, 2002 and 2001, 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, 1999 and 1998, and
the consolidated balance sheet data as of December 31,
2000, 1999 and 1998, 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,              
|                                                      |                                         |                                      
|                                                      |                                         | 2002                                  |                                                     | 2001   |        | 2000   |        | 1999   |        | 1998  
|                                                      |                                         |                                       |                                                     |        |        |        |        |        |        |       
|                                                      |                                         |                                      
|                                                      |                                         | (In thousands, except per share data)
|Statement of Income Data:                             |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|Revenues:                                             |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                      | Web-based product                       |                                       | $                                                   | 55,709 |        |        | $      | 56,318 |        |        | $      | 47,275 |        |        | $      | 31,822 |        |        | $      | 16,058 |       
|                                                      | CD Rom product and other (1)            |                                       |                                                     | 2,041  |        |        |        | 2,699  |        |        |        | 4,614  |        |        |        | 3,726  |        |        |        | 14,370 |       
|                                                      |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                      |                                         |                                       | 57,750                                              |        |        |        | 59,017 |        |        |        | 51,889 |        |        |        | 35,548 |        |        |        | 30,428 |       
|                                                      |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|Cost of revenues:                                     |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                      | Web-based product                       |                                       |                                                     | 16,394 |        |        |        | 16,431 |        |        |        | 15,536 |        |        |        | 13,143 |        |        |        | 7,863  |       
|                                                      | CD Rom product and other                |                                       |                                                     | 1,670  |        |        |        | 2,065  |        |        |        | 2,373  |        |        |        | 1,666  |        |        |        | 5,792  |       
|                                                      |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                      |                                         |                                       | 18,064                                              |        |        |        | 18,496 |        |        |        | 17,909 |        |        |        | 14,809 |        |        |        | 13,655 |       
|                                                      |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                      |                                         | Gross profit                          |                                                     |        | 39,686 |        |        |        | 40,521 |        |        |        | 33,980 |        |        |        | 20,739 |        |        |        | 16,773 |       
|                                                      |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|Operating expenses:                                   |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                      | Selling and marketing                   |                                       |                                                     | 16,467 |        |        |        | 18,447 |        |        |        | 20,519 |        |        |        | 13,254 |        |        |        | 11,577 |       
|                                                      | Platform and product development        |                                       |                                                     | 10,040 |        |        |        | 8,360  |        |        |        | 8,842  |        |        |        | 7,996  |        |        |        | 6,313  |       
|                                                      | General and administrative              |                                       |                                                     | 6,156  |        |        |        | 5,889  |        |        |        | 5,079  |        |        |        | 5,474  |        |        |        | 3,847  |       
|                                                      | Restructuring                           |                                       |                                                     |       |        |        |        | 660    |        |        |        |       |        |        |        |       |        |        |        |       |       
|                                                      | Amortization of goodwill                |                                       |                                                     |       |        |        |        | 1,020  |        |        |        | 1,043  |        |        |        | 115    |        |        |        |       |       
|                                                      | Amortization of other intangible assets |                                       |                                                     | 427    |        |        |        | 460    |        |        |        | 460    |        |        |        | 261    |        |        |        |       |       
|                                                      |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                      |                                         |                                       | Total operating expenses                            |        |        | 33,090 |        |        |        | 34,836 |        |        |        | 35,943 |        |        |        | 27,100 |        |        |        | 21,737 |  
|                                                      |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                      |                                         |                                       | Income (loss) from operations                       |        |        | 6,596  |        |        |        | 5,685  |        |        |        | (1,963 | )      |        |        | (6,361 | )      |        |        | (4,964 | )
|Interest income (expense), net                        |                                         |                                       | 437                                                 |        |        |        | 853    |        |        |        | 887    |        |        |        | 47     |        |        |        | (595   | )     
|Gain on sale of product line                          |                                         |                                       |                                                    |        |        |        |       |        |        |        |       |        |        |        |       |        |        |        | 12,797 |       
|Other income                                          |                                         |                                       |                                                    |        |        |        |       |        |        |        | 2,000  |        |        |        | 2,000  |        |        |        |       |       
|                                                      |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                      |                                         |                                       | Income (loss) before provision for income
    taxes |        |        | 7,033  |        |        |        | 6,538  |        |        |        | 924    |        |        |        | (4,314 | )      |        |        | 7,238  |  
|Provision for income taxes                            |                                         |                                       | 2,602                                               |        |        |        | 1,882  |        |        |        | 66     |        |        |        | 133    |        |        |        | 250    |       
|                                                      |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                      |                                         |                                       | Net income (loss)                                   |        |        | 4,431  |        |        |        | 4,656  |        |        |        | 858    |        |        |        | (4,447 | )      |        |        | 6,988  |  
|Less: income attributable to Class P common
    stock |                                         |                                       |                                                    |        |        |        |       |        |        |        |       |        |        |        |       |        |        |        | 1,367  |       
|                                                      |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                      |                                         |                                       | Net income (loss) attributable to common
    stock  |        | $      | 4,431  |        |        | $      | 4,656  |        |        | $      | 858    |        |        | $      | (4,447 | )      |        | $      | 5,621  |  
|                                                      |                                         |                                       |                                                     |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       

14



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|                             |                                                        |                                       |   |      |        |      |   |      |        |      |   |      |        |  |   |       |       |  |   |      |       | 
|---------------------------- | ------------------------------------------------------ | ------------------------------------- | - | ---- | ------ | ---- | - | ---- | ------ | ---- | - | ---- | ------ |  | - | ----- | ----- |  | - | ---- | ----- | 
|                             |                                                        |                                      
|                             |                                                        | Year ended December 31,              
|                             |                                                        |                                      
|                             |                                                        | 2002                                  |   | 2001 |        | 2000 |   | 1999 |        | 1998
|                             |                                                        |                                       |   |      |        |      |   |      |        |     
|                             |                                                        |                                      
|                             |                                                        | (In thousands, except per share data)
|Net income (loss) per share: |                                                        |                                       |   |      |        |      |   |      |        |      |   |      |        |  |   |       |       |  |   |     
|Class P common stock:        |                                                        |                                       |   |      |        |      |   |      |        |      |   |      |        |  |   |       |       |  |   |     
|                             | Basic and diluted net income per share                 |                                       |   |     |        |      |   |     |        |      |   |     |        |  |   |      |       |  | $ | 1.91 |      
|                             | Weighted average Class P common shares
    outstanding |                                       |   |     |        |      |   |     |        |      |   |     |        |  |   |      |       |  |   | 718  |      
|Common stock:                |                                                        |                                       |   |      |        |      |   |      |        |      |   |      |        |  |   |       |       |  |   |     
|                             | Basic net income (loss) per share                      |                                       | $ | 0.37 |        |      | $ | 0.37 |        |      | $ | 0.07 |        |  | $ | (0.50 | )     |  | $ | 0.85 |      
|                             | Diluted net income (loss) per share                    |                                       | $ | 0.35 |        |      | $ | 0.34 |        |      | $ | 0.06 |        |  | $ | (0.50 | )     |  | $ | 0.59 |      
|                             | Weighted average common shares outstanding:            |                                       |   |      |        |      |   |      |        |      |   |      |        |  |   |       |       |  |   |      |      
|                             |                                                        | Basic                                 |   |      | 11,859 |      |   |      | 12,424 |      |   |      | 11,509 |  |   |       | 8,822 |  |   |      | 6,641 | 
|                             |                                                        | Diluted                               |   |      | 12,512 |      |   |      | 13,519 |      |   |      | 13,509 |  |   |       | 8,822 |  |   |      | 9,563 | 

|                                                 |  |                                                 |        |      |  |      |        |      |  |      |        |  |  |   |        |   |  |   |        |  
|------------------------------------------------ |  | ----------------------------------------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | - |  | - | ------ | -
|                                                 |  |                                                
|                                                 |  | December 31,                                   
|                                                 |  |                                                
|                                                 |  | 2002                                            |        | 2001 |  | 2000 |        | 1999 |  | 1998
|                                                 |  |                                                 |        |      |  |      |        |      |  |     
|                                                 |  |                                                
|                                                 |  | (In thousands, except number of customers data)
|Balance Sheet Data:                              |  |                                                 |        |      |  |      |        |      |  |      |        |  |  |   |        |   |  |   |        |  
|Cash and cash equivalents                        |  | $                                               | 23,096 |      |  | $    | 18,162 |      |  | $    | 17,338 |  |  | $ | 13,598 |   |  | $ | 8,665  |  
|Working capital (deficit)                        |  |                                                 | 3,645  |      |  |      | 2,399  |      |  |      | 1,827  |  |  |   | (691   | ) |  |   | (2,118 | )
|Total assets                                     |  |                                                 | 58,798 |      |  |      | 53,543 |      |  |      | 58,832 |  |  |   | 49,698 |   |  |   | 27,646 |  
|Total debt (including capital lease obligations) |  |                                                 |       |      |  |      |       |      |  |      | 33     |  |  |   | 234    |   |  |   | 6,936  |  
|Deferred revenues                                |  |                                                 | 30,257 |      |  |      | 27,144 |      |  |      | 29,229 |  |  |   | 24,222 |   |  |   | 18,022 |  
|Total stockholders equity (deficit)             |  |                                                 | 17,509 |      |  |      | 16,000 |      |  |      | 16,353 |  |  |   | 13,363 |   |  |   | (6,311 | )
|                                                
|Other Data for Web-based Products:               |  |                                                 |        |      |  |      |        |      |  |      |        |  |  |   |        |   |  |   |        |  
|Annualized contract value (2)                    |  | $                                               | 56,075 |      |  | $    | 56,077 |      |  | $    | 58,354 |  |  | $ | 38,743 |   |  | $ | 25,920 |  
|Number of customers                              |  |                                                 | 812    |      |  |      | 817    |      |  |      | 869    |  |  |   | 583    |   |  |   | 445    |  
|Average annualized contract value per customer   |  | $                                               | 69.0   |      |  | $    | 68.7   |      |  | $    | 67.2   |  |  | $ | 66.5   |   |  | $ | 58.2   |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In 1998, OneSource divested a CD Rom product
    line. Revenues attributable to this divested product line, which
    is included in the statement of operations data through the
    divestiture date, was $2.6 million for the year ended
    December 31, 1998.                                                                                                                                                                                                                 
|   
|(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,

15



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##### Table of Contents



could, and similar words or
expressions (as well as other words or expressions referencing
future events, conditions or circumstances) identify
forward-looking statements.


Overview

OneSource provides primarily Web-based business
and financial information products and services 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 30 business and financial information providers and
OneSources own CorpTech high-technology company database.
The OneSource product line also includes the AppLink software
development kit, which allows Business Browser customers access
Business Browser content with 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 1999, OneSource recorded
$2.0 million of other income related to the software
license agreement.

Revenues from both CD Rom and Web-based products
generally 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 increased 11% to $29.7 million as of
December 31, 2002 from $26.8 million as of
December 31, 2001 and increased 4% from $28.5 million
as of December 31, 2000.

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, amortization of capitalized
software development costs, 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 as a
flat percentage of OneSource 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, as a
calculated fee based upon product growth compared to like
periods from the prior year. Royalties are recorded as deferred
royalties and are expensed as revenues are earned over the term
of the contract period.

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Selling and marketing expense consists primarily
of employee salaries and benefits and sales commissions paid to
OneSources 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, recorded as deferred commissions,
and expensed as revenues are earned over the term of the
contract period. All other selling and marketing costs are
expensed as incurred.

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 the
platform of core software supporting OneSource
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 the
Global Business Taxonomy to integrate disparate information
sources into the OneSource 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
    Judgments 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 of America. 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
its 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 products are generally 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 accounts receivable 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.
OneSource believes that 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 98-1 (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. Examples of
capitalized software development projects are software platforms
used in OneSource products and programs used for its proprietary
classification system. Management is required to use
professional judgment in determining whether development costs
meet the criteria in SOP 98-1 for immediate expense or
capitalization. Capitalized software is amortized over its
estimated useful life of three years. 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 will be reduced by a charge to operations in
the amount of the impairment.

Deferred Royalties and Commissions.Deferred royalties and commissions
include sales commission and royalty costs that are associated
with securing a subscription and procuring information to be
delivered

17



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##### Table of Contents



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 the OneSource
products is 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 might be required.

Intangible Assets.Intangible assets consist of goodwill,
trademark, non-compete agreement, subscriber list, and a
database. Intangible assets, excluding goodwill, are amortized
using the straight-line method over periods of three to seven
years, based on the estimated useful life. The carrying value of
other intangible assets is reviewed on a quarterly basis for the
existence of facts or circumstances both internally and
externally that may suggest impairment. For other intangible
assets, OneSource determines whether an impairment has occurred
based on gross expected future cash 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 OneSource considers important and 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 Statements of Financial Accounting
Standards No. 142 (SFAS No. 142),
Goodwill and Other Intangible Assets, OneSource
ceased amortizing goodwill as of January 1, 2002 and will
annually review the goodwill for potential impairment in the
third quarter, as well as on an event-driven basis, using a fair
value approach. Since OneSource constitutes one reporting unit
under SFAS No. 142, its fair value, which equals its market
capitalization based on the closing price of its common stock as
quoted on the Nasdaq National Market, is compared to its net
assets, which includes the carrying value of goodwill. If market
capitalization exceeds net assets, it is determined that no
impairment has occurred and no adjustment is required.

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,
2002, OneSource has provided a valuation allowance for the full
amount of its net deferred tax assets. 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.

18



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##### Table of Contents





| |                      
| | ---------------------
| | 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 income.
We can give no assurance that the indicated trends in revenues
or operating results will continue in the future.

|                                                    |                                         |                         |     |      |   |      |     |    |   |  |     |    |  
|--------------------------------------------------- | --------------------------------------- | ----------------------- | --- | ---- | - | ---- | --- | -- | - |  | --- | -- | -
|                                                    |                                         |                        
|                                                    |                                         | Year ended December 31,
|                                                    |                                         |                        
|                                                    |                                         | 2002                    |     | 2001 |   | 2000
|                                                    |                                         |                         |     |      |   |     
|                                                    |                                         |                        
|                                                    |                                         | (Percentage of total   
|                                                    |                                         | revenues)              
|Revenues:                                           |                                         |                         |     |      |   |      |     |    |   |  |     |   
|                                                    | Web-based product                       |                         |     | 96   | % |      |     | 95 | % |  |     | 91 | %
|                                                    | CD Rom product and other                |                         |     | 4    |   |      |     | 5  |   |  |     | 9  |  
|                                                    |                                         |                         |     |      |   |      |     |    |   |  |     |   
|                                                    |                                         |                         | 100 |      |   |      | 100 |    |   |  | 100 |   
|                                                    |                                         |                         |     |      |   |      |     |    |   |  |     |   
|Cost of revenues:                                   |                                         |                         |     |      |   |      |     |    |   |  |     |   
|                                                    | Web-based product                       |                         |     | 28   |   |      |     | 28 |   |  |     | 30 |  
|                                                    | CD Rom product and other                |                         |     | 3    |   |      |     | 3  |   |  |     | 5  |  
|                                                    |                                         |                         |     |      |   |      |     |    |   |  |     |   
|                                                    |                                         |                         | 31  |      |   |      | 31  |    |   |  | 35  |   
|                                                    |                                         |                         |     |      |   |      |     |    |   |  |     |   
|Gross profit                                        |                                         |                         | 69  |      |   |      | 69  |    |   |  | 65  |   
|Operating expenses:                                 |                                         |                         |     |      |   |      |     |    |   |  |     |   
|                                                    | Selling and marketing                   |                         |     | 29   |   |      |     | 31 |   |  |     | 39 |  
|                                                    | Platform and product development        |                         |     | 17   |   |      |     | 14 |   |  |     | 17 |  
|                                                    | General and administrative              |                         |     | 11   |   |      |     | 10 |   |  |     | 10 |  
|                                                    | Restructuring                           |                         |     |     |   |      |     | 1  |   |  |     |   |  
|                                                    | Amortization of goodwill                |                         |     |     |   |      |     | 1  |   |  |     | 2  |  
|                                                    | Amortization of other intangible assets |                         |     | 1    |   |      |     | 2  |   |  |     | 1  |  
|                                                    |                                         |                         |     |      |   |      |     |    |   |  |     |   
|Income (loss) from operations                       |                                         |                         | 11  |      |   |      | 10  |    |   |  | (4  | ) 
|Interest income, net                                |                                         |                         | 1   |      |   |      | 1   |    |   |  | 2   |   
|Other income                                        |                                         |                         |    |      |   |      |    |    |   |  | 4   |   
|                                                    |                                         |                         |     |      |   |      |     |    |   |  |     |   
|Income (loss) before provision for income
    taxes |                                         |                         | 12  |      |   |      | 11  |    |   |  | 2   |   
|Provision for income taxes                          |                                         |                         | 4   |      |   |      | 3   |    |   |  |    |   
|                                                    |                                         |                         |     |      |   |      |     |    |   |  |     |   
|Net income                                          |                                         |                         | 8   | %    |   |      | 8   | %  |   |  | 2   | % 
|                                                    |                                         |                         |     |      |   |      |     |    |   |  |     |   

Comparison of Results for The Years Ended
December 31, 2002 and 2001

Revenues.Total
revenues decreased 2% to $57.8 million for the year ended
December 31, 2002 from $59.0 million for the year
ended December 31, 2001.

Web-based product revenues decreased 1% to
$55.7 million for the year ended December 31, 2002
from $56.3 million for the year ended December 31,
2001. At the same time, CD Rom product and other revenues, which
consist of licensing royalties and mailing lists, decreased 24%
to $2.0 million in 2002 from $2.7 million in 2001.
These decreases were primarily a result of the effects of the
economic slowdown and resulting impact on OneSources
customer base.

Cost of Revenues.Total cost of revenues decreased 2% to
$18.1 million for the year ended December 31, 2002
from $18.5 million for the year ended December 31,
2001. The decrease in total cost of revenues during 2002 was
principally due to the reduction of costs of $0.4 million
associated with the expansion of the OneSource CorpTech
high-technology database relative to 2001 and a decrease in
communication costs of $0.2 million. Partially offsetting
these decreases were higher costs for royalties of
$0.1 million and amortization of capitalized software of
$0.1 million. OneSource expects its gross margin for 2003
to decrease

19



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##### Table of Contents



modestly to approximately 68% from the overall
2002 rate of 69% to reflect a higher cost of royalties for new
product introductions in advance of revenue recognition, in
addition to expense related to the cost of services provided by
the Products and Solutions Team.


Cost of Web-based product revenues was
$16.4 million for each of the years ended December 31,
2002 and 2001. As a percentage of Web-based product revenues,
cost of Web-based product revenues was 29% for each of the years
ended December 31, 2002 and 2001.

Cost of CD Rom product and other revenues
decreased 19% to $1.7 million for the year ended
December 31, 2002 from $2.1 million for the year ended
December 31, 2001. This decrease in the cost of CD Rom
product and other revenues during 2002 was primarily due to the
reduction of costs associated with the expansion of the
OneSource CorpTech high-technology database relative to 2001. As
a percentage of CD Rom product and other revenues, cost of CD
Rom product and other revenues increased to 82% in 2002 from 77%
in 2001, primarily due to the decrease in CD Rom product and
other revenues.

Selling and Marketing Expense.Selling and marketing expense
decreased 11% to $16.5 million for the year ended
December 31, 2002 from $18.4 million for the year
ended December 31, 2001. Selling and marketing expense
decreased as a percentage of total revenues to 29% in 2002 from
31% in 2001. These decreases were principally due to decreased
compensation-related expense by $2.1 million, decreased
recruiting expense by $0.1 million, and decreased travel
and entertainment expenses by $0.3 million, which were
primarily the result of workforce reductions in 2001. These
decreases were partially offset by increases in direct marketing
expenses by $0.3 million and in fees paid to external
consultants by $0.6 million. OneSource expects selling and
marketing expense to increase by approximately 8% as it intends
to enhance sales and marketing initiatives focused on Global
5000 companies, its target market.

Platform and Product Development Expense.Platform and product development
expense increased 20% to $10.0 million for the year ended
December 31, 2002 from $8.4 million for the year ended
December 31, 2001. Platform and product development expense
increased as a percentage of total revenues to 17% in 2002 from
14% in 2001. These increases were primarily the result of higher
compensation related expense by $2.2 million due to
increased staffing, increased use of outside contractors for
platform and product development by $0.4 million, and
increased recruiting expense by $0.1 million. Partially
offsetting these increases was the capitalization of software
development costs associated with the expanded development of
new platforms and products that increased to $1.9 million
for 2002 from $0.8 million for 2001. These costs were
capitalized in accordance with SOP 98-1, Accounting
for the Costs of Computer Software Developed or Obtained for
Internal Use. Costs associated with the maintenance of
existing systems are expensed as incurred. OneSource expects a
$2.0 million, or 20%, increase in platform and product
development expense, net of capitalized software development
costs, as it intends to invest further in the tools and
technology to address the needs of Global 5000 customers,
its target market. OneSource anticipates capitalized software
development costs to be approximately $3.0 million to
$4.0 million in 2003.

General and Administrative Expense.General and administrative expense
increased 5% to $6.2 million for the year ended
December 31, 2002 from $5.9 million for the year ended
December 31, 2001. General and administrative expense
increased as a percentage of total revenues to 11% in 2002 from
10% in 2001. These increases were primarily due to higher
insurance premium rates for directors and officers liability
insurance and other commercial insurance by $0.1 million,
and higher general supplies, postage and shipping costs by
$0.1 million. OneSource expects general and administrative
expense to increase approximately 15% in 2003 to support
additional infrastructure.

Restructuring.Restructuring expense decreased to
zero for the year ended December 31, 2002 from
$0.7 million for the year ended December 31, 2001.
Restructuring expense during the year ended December 31,
2001 was the result of cost reduction measures implemented in
both July and November 2001 that resulted in an 11% reduction in
our overall workforce and the consolidation of certain
functions. Restructuring expense primarily consists of severance
related expenses associated with the reduction in
OneSources overall workforce.

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Amortization of Goodwill.Amortization of goodwill decreased to
zero for the year ended December 31, 2002 from
$1.0 million for the year ended December 31, 2001. This
decrease was the result of OneSources adoption of SFAS
No. 142, Goodwill and Other Intangible Assets,
and its requirement to cease the amortization of goodwill as of
January 1, 2002.

Amortization of Other Intangible Assets.Amortization of other intangible
assets decreased to $0.4 million for the year ended
December 31, 2002 from $0.5 million for the year ended
December 31, 2001. This decrease was the result of the cost
of a non-compete agreement becoming fully amortized during the
year ended December 31, 2002.

Interest Income, Net.Interest income, net of interest
expense, decreased to $0.4 million for the year ended
December 31, 2002 from $0.9 million for the year ended
December 31, 2001. The decrease was primarily the result of
lower rates on invested funds, which was offset partially by
higher average cash balances.

Provision for Income Taxes.Provision for income taxes increased
to $2.6 million for the year ended December 31, 2002
from $1.9 million for the year ended December 31,
2001. This increase was due to pre-tax income of
$7.0 million at an effective tax rate of 37% for the year
ended December 31, 2002 as compared to pre-tax income of
$6.5 million at an effective tax rate of 29% for the year
ended December 31, 2001. The effective tax rate increase
was primarily due to the utilization of all remaining tax
benefits in 2001 from federal net operating loss carryforwards.
In addition, net income related to OneSources United
Kingdom operations is taxed at the United Kingdom statutory rate
of 30%, which results in the worldwide effective tax rate being
lower than the United States federal statutory rate of 34%.

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.

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 Business Browser customers,
an increase in the number of designated users of the Business
Browser products subscribed to by existing customers, and the
sale of new Business Browser 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,
completion of the transition away from the legacy CD Rom
business at the end of 2000, and focus on the Business Browser
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 by $0.3 million, increased
computer hosting costs by $0.1 million, increased
depreciation expense associated with computer equipment used for
data processing and on-line requirements by $0.3 million,
and increased software amortization cost by $0.3 million.
These increases were partially offset by a decrease for printed
directories expense of $0.2 million due to the
discontinuance of our printed directories product line at the
end of 2000. 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

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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 by $0.9 million, decreased compensation
related expense by $0.1 million, decreased travel expenses
by $0.5 million, and decreased outside services by
$0.3 million. 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.

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 by $0.2 million. 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.

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 by $0.7 million. General and
administrative expense as a percentage of total revenues was 10%
in 2001 and 2000.

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 OneSources overall workforce

Amortization of
Goodwill.Amortization of goodwill was
$1.0 million for each of the years ended December 31,
2002 and 2001. In accordance with SFAS No. 142,
Goodwill and Other Intangible Assets, OneSource has
ceased amortization of goodwill as of January 1, 2002.

Amortization of Other Intangible Assets.Amortization of other intangible
assets expense was $0.5 million for each of 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 other
intangible assets, which consists of a non-compete agreement,
subscriber list, database, and trademark that were acquired as
part of that transaction.

Interest Income, Net.Interest income, net of interest
expense, was $0.9 million for both years ended
December 31, 2001 and December 31, 2000.

Other Income.Other
income decreased to zero for the year ended December 31, 2001
from $2.0 million for the year ended December 31,
2000. 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 an effective tax rate of 29% for the
year ended December 31, 2001 as compared to

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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. In addition, net
income related to OneSources United Kingdom operations is
taxed at the United Kingdom statutory rate of 30%, which results
in the worldwide effective tax rate being lower than the United
States federal statutory rate of 34%.


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, 2002. 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
Statements and the Notes thereto. Our operating results for any
quarter are not necessarily indicative of results for any future
period.

|                                           |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |        |        |       | 
|------------------------------------------ | --------------------------------------- | ------------------------------------- | ---------------------------------------- | --------- | ------ | -------- | ------ | -------- | ------ | -------- | ------ | --------- | ------ | -------- | ------ | -------- | ------ | ----- | ------ | ------ | ------ | ----- | ------ | ------ | ------ | ----- | ------ | ------ | ------ | ----- | ------ | ------ | ------ | ----- | 
|                                           |                                         |                                      
|                                           |                                         | Quarter ended                        
|                                           |                                         |                                      
|                                           |                                         |                                       |                                          |          
|                                           |                                         | 2002                                  |                                          | 2001     
|                                           |                                         |                                       |                                          |          
|                                           |                                         | Dec. 31,                              |                                          | Sept. 30, |        | June 30, |        | Mar. 31, |        | Dec. 31, |        | Sept. 30, |        | June 30, |        | Mar. 31,
|                                           |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |         
|                                           |                                         |                                      
|                                           |                                         | (In thousands, except per share data)
|Statement of Income Data:                  |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Revenues:                                  |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           | Web-based product                       |                                       | $                                        | 14,215    |        |          | $      | 14,042   |        |          | $      | 13,803    |        |          | $      | 13,649   |        |       | $      | 14,210 |        |       | $      | 14,059 |        |       | $      | 14,323 |        |       | $      | 13,726 |       
|                                           | CD Rom product and other                |                                       |                                          | 381       |        |          |        | 515      |        |          |        | 570       |        |          |        | 575      |        |       |        | 654    |        |       |        | 611    |        |       |        | 686    |        |       |        | 748    |       
|                                           |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           |                                         |                                       | 14,596                                   |           |        |          | 14,557 |          |        |          | 14,373 |           |        |          | 14,224 |          |        |       | 14,864 |        |        |       | 14,670 |        |        |       | 15,009 |        |        |       | 14,474 |       
|                                           |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Cost of revenues:                          |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           | Web-based product                       |                                       |                                          | 4,297     |        |          |        | 4,063    |        |          |        | 4,046     |        |          |        | 3,988    |        |       |        | 4,166  |        |       |        | 4,123  |        |       |        | 4,129  |        |       |        | 4,013  |       
|                                           | CD Rom product and other                |                                       |                                          | 399       |        |          |        | 438      |        |          |        | 408       |        |          |        | 425      |        |       |        | 372    |        |       |        | 469    |        |       |        | 607    |        |       |        | 617    |       
|                                           |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           |                                         |                                       | 4,696                                    |           |        |          | 4,501  |          |        |          | 4,454  |           |        |          | 4,413  |          |        |       | 4,538  |        |        |       | 4,592  |        |        |       | 4,736  |        |        |       | 4,630  |       
|                                           |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Gross profit                               |                                         |                                       | 9,900                                    |           |        |          | 10,056 |          |        |          | 9,919  |           |        |          | 9,811  |          |        |       | 10,326 |        |        |       | 10,078 |        |        |       | 10,273 |        |        |       | 9,844  |       
|                                           |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Operating expenses:                        |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           | Selling and marketing                   |                                       |                                          | 4,170     |        |          |        | 4,385    |        |          |        | 4,189     |        |          |        | 3,723    |        |       |        | 3,925  |        |       |        | 4,143  |        |       |        | 5,105  |        |       |        | 5,274  |       
|                                           | Platform and product development        |                                       |                                          | 2,367     |        |          |        | 2,279    |        |          |        | 2,741     |        |          |        | 2,653    |        |       |        | 2,201  |        |       |        | 2,080  |        |       |        | 2,022  |        |       |        | 2,057  |       
|                                           | General and administrative              |                                       |                                          | 1,613     |        |          |        | 1,677    |        |          |        | 1,291     |        |          |        | 1,575    |        |       |        | 1,646  |        |       |        | 1,490  |        |       |        | 1,410  |        |       |        | 1,343  |       
|                                           | Restructuring                           |                                       |                                          |          |        |          |        |         |        |          |        |          |        |          |        |         |        |       |        | 286    |        |       |        | 374    |        |       |        |       |        |       |        |       |       
|                                           | Amortization of goodwill                |                                       |                                          |          |        |          |        |         |        |          |        |          |        |          |        |         |        |       |        | 248    |        |       |        | 253    |        |       |        | 258    |        |       |        | 261    |       
|                                           | Amortization of other intangible assets |                                       |                                          | 82        |        |          |        | 115      |        |          |        | 115       |        |          |        | 115      |        |       |        | 115    |        |       |        | 115    |        |       |        | 115    |        |       |        | 115    |       
|                                           |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           |                                         |                                       | Total operating expenses                 |           |        | 8,232    |        |          |        | 8,456    |        |           |        | 8,336    |        |          |        | 8,066 |        |        |        | 8,421 |        |        |        | 8,455 |        |        |        | 8,910 |        |        |        | 9,050 | 
|                                           |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           |                                         |                                       | Income from operations                   |           |        | 1,668    |        |          |        | 1,600    |        |           |        | 1,583    |        |          |        | 1,745 |        |        |        | 1,905 |        |        |        | 1,623 |        |        |        | 1,363 |        |        |        | 794   | 
|Interest income, net                       |                                         |                                       | 138                                      |           |        |          | 95     |          |        |          | 102    |           |        |          | 102    |          |        |       | 180    |        |        |       | 76     |        |        |       | 335    |        |        |       | 262    |       
|                                           |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           |                                         |                                       | Income before provision for income taxes |           |        | 1,806    |        |          |        | 1,695    |        |           |        | 1,685    |        |          |        | 1,847 |        |        |        | 2,085 |        |        |        | 1,699 |        |        |        | 1,698 |        |        |        | 1,056 | 
|Provision for income taxes                 |                                         |                                       | 668                                      |           |        |          | 627    |          |        |          | 642    |           |        |          | 665    |          |        |       | 92     |        |        |       | 681    |        |        |       | 684    |        |        |       | 425    |       
|                                           |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           |                                         |                                       | Net income                               |           | $      | 1,138    |        |          | $      | 1,068    |        |           | $      | 1,043    |        |          | $      | 1,182 |        |        | $      | 1,993 |        |        | $      | 1,018 |        |        | $      | 1,014 |        |        | $      | 631   | 
|                                           |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|Basic net income per share                 |                                         | $                                     | 0.10                                     |           |        | $        | 0.09   |          |        | $        | 0.09   |           |        | $        | 0.10   |          |        | $     | 0.16   |        |        | $     | 0.08   |        |        | $     | 0.08   |        |        | $     | 0.05   |       
|Diluted net income per share               |                                         | $                                     | 0.09                                     |           |        | $        | 0.09   |          |        | $        | 0.08   |           |        | $        | 0.09   |          |        | $     | 0.15   |        |        | $     | 0.07   |        |        | $     | 0.07   |        |        | $     | 0.05   |       
|Weighted average common shares outstanding |                                         |                                       |                                          |           |        |          |        |          |        |          |        |           |        |          |        |          |        |       |        |        |        |       |        |        |        |       |        |        |        |       |        |       
|                                           |                                         | Basic                                 |                                          |           | 11,658 |          |        |          | 11,797 |          |        |           | 11,957 |          |        |          | 12,029 |       |        |        | 12,158 |       |        |        | 12,547 |       |        |        | 12,653 |       |        |        | 12,338 |      
|                                           |                                         | Diluted                               |                                          |           | 12,180 |          |        |          | 12,368 |          |        |           | 12,620 |          |        |          | 12,884 |       |        |        | 13,112 |       |        |        | 13,604 |       |        |        | 13,682 |       |        |        | 13,631 |      

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|                       |                                         |                                |     |           |    |          |     |          |    |          |     |           |    |          |     |          |    |  |     |    |    |  |     |    |    |  |     |    |    |  |     |    |    | 
|---------------------- | --------------------------------------- | ------------------------------ | --- | --------- | -- | -------- | --- | -------- | -- | -------- | --- | --------- | -- | -------- | --- | -------- | -- |  | --- | -- | -- |  | --- | -- | -- |  | --- | -- | -- |  | --- | -- | -- | 
|                       |                                         |                               
|                       |                                         | Quarter ended                 
|                       |                                         |                               
|                       |                                         |                                |     |          
|                       |                                         | 2002                           |     | 2001     
|                       |                                         |                                |     |          
|                       |                                         | Dec. 31,                       |     | Sept. 30, |    | June 30, |     | Mar. 31, |    | Dec. 31, |     | Sept. 30, |    | June 30, |     | Mar. 31,
|                       |                                         |                                |     |           |    |          |     |          |    |          |     |           |    |          |     |         
|                       |                                         | (Percentage of total revenues)
|Revenues:              |                                         |                                |     |           |    |          |     |          |    |          |     |           |    |          |     |          |    |  |     |    |    |  |     |    |    |  |     |    |    |  |     |   
|                       | Web-based product                       |                                |     | 97        | %  |          |     | 96       | %  |          |     | 96        | %  |          |     | 96       | %  |  |     | 96 | %  |  |     | 96 | %  |  |     | 95 | %  |  |     | 95 | % 
|                       | CD Rom product and other                |                                |     | 3         |    |          |     | 4        |    |          |     | 4         |    |          |     | 4        |    |  |     | 4  |    |  |     | 4  |    |  |     | 5  |    |  |     | 5  |   
|                       |                                         |                                |     |           |    |          |     |          |    |          |     |           |    |          |     |          |    |  |     |    |    |  |     |    |    |  |     |    |    |  |     |   
|Total revenues         |                                         |                                | 100 |           |    |          | 100 |          |    |          | 100 |           |    |          | 100 |          |    |  | 100 |    |    |  | 100 |    |    |  | 100 |    |    |  | 100 |   
|                       |                                         |                                |     |           |    |          |     |          |    |          |     |           |    |          |     |          |    |  |     |    |    |  |     |    |    |  |     |    |    |  |     |   
|Cost of revenues:      |                                         |                                |     |           |    |          |     |          |    |          |     |           |    |          |     |          |    |  |     |    |    |  |     |    |    |  |     |    |    |  |     |   
|                       | Web-based product                       |                                |     | 29        |    |          |     | 28       |    |          |     | 28        |    |          |     | 28       |    |  |     | 28 |    |  |     | 28 |    |  |     | 28 |    |  |     | 28 |   
|                       | CD Rom product and other                |                                |     | 3         |    |          |     | 3        |    |          |     | 3         |    |          |     | 3        |    |  |     | 3  |    |  |     | 3  |    |  |     | 4  |    |  |     | 4  |   
|                       |                                         |                                |     |           |    |          |     |          |    |          |     |           |    |          |     |          |    |  |     |    |    |  |     |    |    |  |     |    |    |  |     |   
|Total cost of revenues |                                         |                                | 32  |           |    |          | 31  |          |    |          | 31  |           |    |          | 31  |          |    |  | 31  |    |    |  | 31  |    |    |  | 32  |    |    |  | 32  |   
|                       |                                         |                                |     |           |    |          |     |          |    |          |     |           |    |          |     |          |    |  |     |    |    |  |     |    |    |  |     |    |    |  |     |   
|Gross profit           |                                         |                                | 68  |           |    |          | 69  |          |    |          | 69  |           |    |          | 69  |          |    |  | 69  |    |    |  | 69  |    |    |  | 68  |    |    |  | 68  |   
|                       |                                         |                                |     |           |    |          |     |          |    |          |     |           |    |          |     |          |    |  |     |    |    |  |     |    |    |  |     |    |    |  |     |   
|Operating expenses:    |                                         |                                |     |           |    |          |     |          |    |          |     |           |    |          |     |          |    |  |     |    |    |  |     |    |    |  |     |    |    |  |     |   
|                       | Selling and marketing                   |                                |     | 28        |    |          |     | 30       |    |          |     | 29        |    |          |     | 26       |    |  |     | 26 |    |  |     | 28 |    |  |     | 34 |    |  |     | 36 |   
|                       | Platform and product development        |                                |     | 16        |    |          |     | 16       |    |          |     | 19        |    |          |     | 19       |    |  |     | 15 |    |  |     | 14 |    |  |     | 13 |    |  |     | 14 |   
|                       | General and administrative              |                                |     | 11        |    |          |     | 12       |    |          |     | 9         |    |          |     | 11       |    |  |     | 11 |    |  |     | 10 |    |  |     | 9  |    |  |     | 9  |   
|                       | Restructuring                           |                                |     |          |    |          |     |         |    |          |     |          |    |          |     |         |    |  |     | 2  |    |  |     | 3  |    |  |     |   |    |  |     |   |   
|                       | Amortization of goodwill                |                                |     |          |    |          |     |         |    |          |     |          |    |          |     |         |    |  |     | 2  |    |  |     | 2  |    |  |     | 2  |    |  |     | 2  |   
|                       | Amortization of other intangible assets |                                |     | 1         |    |          |     | 1        |    |          |     | 1         |    |          |     | 1        |    |  |     | 1  |    |  |     | 1  |    |  |     | 1  |    |  |     | 2  |   
|                       |                                         |                                |     |           |    |          |     |          |    |          |     |           |    |          |     |          |    |  |     |    |    |  |     |    |    |  |     |    |    |  |     |   
|                       |                                         | Total operating expenses       |     |           | 56 |          |     |          | 58 |          |     |           | 58 |          |     |          | 57 |  |     |    | 57 |  |     |    | 58 |  |     |    | 59 |  |     |    | 63 | 
|                       |                                         |                                |     |           |    |          |     |          |    |          |     |           |    |          |     |          |    |  |     |    |    |  |     |    |    |  |     |    |    |  |     |   
|Income from operations |                                         |                                | 11  | %         |    |          | 11  | %        |    |          | 11  | %         |    |          | 12  | %        |    |  | 13  | %  |    |  | 11  | %  |    |  | 9   | %  |    |  | 5   | % 
|                       |                                         |                                |     |           |    |          |     |          |    |          |     |           |    |          |     |          |    |  |     |    |    |  |     |    |    |  |     |    |    |  |     |   

Annualized Contract Value

One measure of the performance of
OneSources business is annualized contract
value. Annualized contract value is a measurement that
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 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

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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, 2001 |  | $         | 26,760 |                |  | $              | 4,673.1 |  |  | $ | 56,077 | 
|December 31, 2002 |  |           | 29,748 |                |  |                | 4,672.9 |  |  |   | 56,075 | 

The aggregate annualized contract value for
Web-based products was $56.1 million as of December 31,
2002 and December 31, 2001. Of this $56.1 million,
$42.6 million was attributable to those customers that were
under contract as of both December 31, 2001 and 2002. The
renewal rate for subscribers of the Business Browser product
line as of December 31, 2002 was 76% calculated on a dollar
basis, whereas the renewal rate for those subscribers that also
used the AppLink software development kit as of
December 31, 2002 was 82% calculated on a dollar basis.

The number of Web-based customers decreased to
812 at December 31, 2002 from 817 at December 31,
2001. On average, OneSources customers for Web-based
products as of December 31, 2002 had an annualized contract
value of $69,058 per customer, compared to an average annualized
contract value of $68,700 per customer as of December 31,
2001. 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, 2002, 51 organizations
subscribed to the AppLink software development kit. Such
customers as of December 31, 2002 generated, on average,
approximately $345,000 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 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, our initial public offering
which closed in May 1999, and issuance of stock pursuant to
stock options and employee stock purchase plan. In addition,
during December 2002, OneSource entered into a loan and security
agreement with Silicon Valley Bank for borrowings up to
$10.0 million. The loan and security agreement is for one
year from the date of the signing and represents a working
capital revolving line of credit and an equipment line of credit
for up to $5.0 million each.

Cash and cash equivalents totaled
$23.1 million at December 31, 2002, compared to
$18.2 million at December 31, 2001. The increase was
primarily due to funds provided by operating activities of
$12.7 million, partially offset by net cash used in
investing activities of $3.7 million and in financing
activities of $4.5 million.

Net cash provided by operating activities was
$12.7 million for the year ended December 31, 2002,
compared to $9.4 million for the year ended
December 31, 2001. The net increase of $3.3 million
period to period was the result of a net increase in assets and
liabilities of $4.0 million and an increase of
$0.5 million due to an increase of tax benefit associated
with the disposition of stock options, partially offset by a
decrease in depreciation and amortization of $1.0 million,
and net income of $4.4 million in 2002 compared to net
income of $4.7 million in 2001.

Net cash used in investing activities was
$3.7 million for the year ended December 31, 2002,
compared to $2.6 million for the year ended
December 31, 2001. Net cash used in investing activities
was primarily due to purchases of property and equipment for
$1.9 million during the year ended December 31, 2002
and $1.8 million during the year ended December 31,
2001, as well as $1.9 million for capitalized software

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development costs for the year ended
December 31, 2002 and $0.8 million for the year ended
December 31, 2001.


Net cash used in financing activities was
$4.5 million for the year ended December 31, 2002,
compared to $6.1 million for the year ended
December 31, 2001. Net cash used in financing activities
primarily consisted of the repurchase of common stock of
$5.6 million during the year ended December 31, 2002
and $8.1 million during the year ended December 31,
2001, offset in part by proceeds from the issuance of stock
pursuant to stock options and employee stock purchase plan of
$1.1 million during the year ended December 31, 2002
and $2.0 million during the year ended December 31,
2001.

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 following
twelve months. However, in the event of a strategic cash
requirement, OneSource has entered into a revolving loan
agreement during December 2002 with Silicon Valley Bank for up
to $10.0 million.

In April 2001, OneSource announced a stock
buyback program to repurchase up to 1,000,000 shares of
OneSource common stock over the following twelve months. In
January 2002, OneSource completed the repurchase of its common
stock authorized under this program at an average price of $8.48
per share.

In January 2002, OneSources Board of
Directors announced a second stock buyback program to repurchase
up to an additional $5.0 million of its common stock over
the following twelve months. In November 2002, OneSource
completed its second stock buyback program, having repurchased
749,931 shares of its common stock at an average price of $6.67
per share.

In October 2002, OneSources Board or
Directors announced a third stock buyback program to repurchase
up to an additional $5.0 million of its common stock over
the following twelve months. As of December 31, 2002, under
this third stock buyback program, OneSource had repurchased
28,819 shares of its common stock for a total cost of
$0.2 million at an average price of $6.64 per share.
OneSource intends to use a portion of its existing cash and cash
equivalents balances to execute additional repurchases under
this third stock buyback program.

Effective August 31, 2002, OneSource began
to reissue treasury stock, using the average cost method, for
stock option exercises associated with OneSources various
stock option plans and the 1999 Employee Stock Purchase Plan, as
amended. As of December 31, 2002, OneSource had reissued
173,038 shares of its treasury stock having an average cost of
$7.72 per share.

Contractual Obligations and
Commitments

The following table presents OneSources
contractual obligations and commercial commitments as of
December 31, 2002 over the next five years.

|                  |  |                        |       |      |  |      |       |      |  |      |     |       |  |   |     |  |  |   |     |  |  |   |        | 
|----------------- |  | ---------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | --- | ----- |  | - | --- |  |  | - | --- |  |  | - | ------ | 
|                  |  |                       
|                  |  | Payments due by period
|                  |  |                       
|                  |  | 2003                   |       | 2004 |  | 2005 |       | 2006 |  | 2007 |     | Total
|                  |  |                        |       |      |  |      |       |      |  |      |     |      
|                  |  |                       
|                  |  | (In thousands)        
|Operating leases  |  | $                      | 1,140 |      |  | $    | 651   |      |  | $    | 239 |       |  | $ | 156 |  |  | $ | 116 |  |  | $ | 2,302  | 
|Royalty contracts |  |                        | 7,252 |      |  |      | 2,953 |      |  |      |    |       |  |   |    |  |  |   |    |  |  |   | 10,205 | 
|                  |  |                        |       |      |  |      |       |      |  |      |     |       |  |   |     |  |  |   |     |  |  |   |        | 
|                  |  | $                      | 8,392 |      |  | $    | 3,604 |      |  | $    | 239 |       |  | $ | 156 |  |  | $ | 116 |  |  | $ | 12,507 | 
|                  |  |                        |       |      |  |      |       |      |  |      |     |       |  |   |     |  |  |   |     |  |  |   |        | 

Recently Issued Accounting
Pronouncements

In June 2001, the Financial Accounting Standards
Board (the FASB) issued Statement of Financial
Accounting Standards No. 143 (SFAS
No. 143), Accounting for Asset Retirement
Obligations, which is scheduled to become effective as of
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.

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In August 2001, the FASB issued Statement of
Financial Accounting Standards No. 144 (SFAS
No. 144), Accounting for the Impairment or
Disposal of Long-Lived Assets, which became effective as
of January 1, 2002. SFAS No. 144 supersedes Statement
of Financial Accounting Standards No. 121 (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 has determined
that the adoption of SFAS No. 144 had no impact on its
financial position and results of operations.

In June 2002, the FASB issued Statement of
Financial Accounting Standards No. 146 (SFAS
No. 146), Accounting for Costs Associated with
Exit or Disposal Activities, which is effective for exit
or disposal activities initiated after December 31, 2002.
SFAS No. 146 addresses financial accounting and reporting
for costs associated with exit or disposal activities and
supersedes Emerging Issues Task Force Issue No. 94-3,
Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring). OneSource does not
expect that the adoption of SFAS No. 146 will have a
significant impact on its financial position and results of
operations.

In November 2002, the FASB issued Financial
Accounting Standards Board Interpretation No. 45 (FIN
45), Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others an interpretation of FASB Statements
No. 5, 57, and 107 and rescission of FASB Interpretation
No. 34. FIN 45 requires that a guarantor recognize,
at the inception of a guarantee, a liability for the fair value
of the obligation undertaken by issuing the guarantee. FIN 45
also requires additional disclosures to be made by a guarantor
in its interim and annual financial statements about its
obligations under certain guarantees it has issued. The
accounting requirements for the initial recognition of
guarantees are applicable on a prospective basis for guarantees
issued or modified after December 31, 2002. The disclosure
requirements are effective for all guarantees outstanding,
regardless of when they were issued or modified, during the
first quarter of fiscal 2003. OneSource does not expect that the
adoption of FIN 45 will have a significant impact on its
financial position and results of operations. The following is a
summary of provisions of OneSources agreements that
OneSource has determined are within the scope of FIN 45:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | OneSources agreements with OneSource
    product customers, third party information and technology
    providers, and vendors include standard indemnification
    provisions. Under these agreements, OneSource generally agrees
    to defend, indemnify, and hold harmless the indemnified party
    with respect to any third party claim that the OneSource
    product, excluding any data or technology provided by the
    indemnified party, infringes a United States or United Kingdom
    patent, copyright, trade secret, or other proprietary right. The
    terms of these indemnification provisions are generally
    perpetual after execution of the agreement. The maximum
    potential amount of future payments OneSource may be required to
    make under these indemnification provisions is unlimited.
    OneSource has never incurred costs to defend lawsuits or settle
    actions related to these indemnification provisions. As a
    result, OneSource believes that the estimated fair market value
    of these indemnification provisions is minimal. Accordingly,
    OneSource does not have any liabilities recorded in its
    financial statements related to these provisions as of
    December 31, 2002.
|
| | OneSources agreements with OneSource
    product customers also include standard warranty provisions.
    OneSource warrants that it has the right to license the
    OneSource product line to customers, but does not warrant the
    accuracy, adequacy, completeness, or timeliness of Business
    Browser content or the OneSource product. If necessary,
    OneSource would provide for the estimated cost of product
    warranties based on specific warranty claims and claim history.
    However, OneSource has never incurred expense under its product
    warranties. As a result, OneSource believes that the estimated
    fair market value of this warranty provision is minimal.
    Accordingly, OneSource does not have any liabilities recorded in
    its financial statements as related to this provision as of
    December 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                     

In November 2002, the Emerging Issues Task Force
reached a consensus on Emerging Issues Task Force
Issue 00-21 (EITF Issue 00-21),
Revenue Arrangements with Multiple Deliverables.
EITF Issue 00-21 addresses revenue recognition on
arrangements encompassing multiple elements that are delivered
at different points in time, defining criteria that must be met
for elements to be considered to be a separate unit of

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accounting. If an element is determined to be a
separate unit of accounting, the revenue for the element is
recognized at the time of delivery. OneSource does not expect
that the adoption of EITF Issue 00-21 will have a
material impact on its results of operations or financial
position.


In December 2002, the FASB issued Statement of
Financial Accounting Standards No. 148 (SFAS
No. 148), Accounting for Stock-Based
Compensation  Transition and Disclosure 
An Amendment of SFAS No. 123, which becomes effective
for interim and fiscal periods ending after December 31,
2002. SFAS No. 148 amends Statement of Financial Accounting
Standards No. 123 (SFAS No. 123),
Accounting for Stock-Based Compensation, to provide
alternative methods of transition for a voluntary change to the
fair value based method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure
requirements of SFAS No. 123 to require prominent
disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee
compensation and the effect of the method used on reported
results. OneSource does not expect that the adoption of SFAS
No. 148 will have a significant impact on its financial
position and results of operations.

In January 2003, the FASB issued Financial
Accounting Standards Board Interpretation No. 46
(FIN 46), Consolidation of Variable
Interest Entities  an interpretation of ARB
No. 51. FIN 46 addresses how to identify
variable interest entities and how an enterprise assesses its
interests in a variable interest entity to decide whether to
consolidate that entity. The requirements of FIN 46 apply to all
variable interest entities created after January 31, 2003,
and to variable interest entities in which an enterprise obtains
an interest after that date. It applies in the first fiscal year
or interim period beginning after June 15, 2003 to variable
interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003.
OneSource does not expect that the adoption of FIN 46 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 may 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 discussed below 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, AND WE MAY NOT SUSTAIN OR INCREASE NET INCOME UNLESS WE
CONTINUE TO OFFSET OUR ROYALTY PAYMENTS AND OPERATING EXPENSES
WITH REVENUES FROM OUR WEB-BASED PRODUCTS AND SERVICES. 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 income from operations of
$5.7 million in 2001 and $6.6 million in 2002. As of
December 31, 2002, we had an accumulated deficit of
$5.9 million. If we are unable to offset our royalty
payments and operating expenses with revenues from our Web-based
products and services, we may not be able to sustain or increase
net income.

WE RELY ON GENERATING SUBSCRIPTION REVENUES FROM
OUR WEB-BASED PRODUCT LINE, AND WE MAY NOT SUSTAIN OR INCREASE
NET INCOME UNLESS DEMAND FOR OUR WEB-BASED PRODUCTS REMAINS THE
SAME OR CONTINUES TO GROW. Subscription revenues from our
Web-based product line accounted for 96% of total revenues in
2002, 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. As a result, our future
financial condition may depend heavily on the success or failure
of our Web-based product line, including the ease of integration
of information from these products with customer internal
applications. These products were introduced in December 1996,
and it is difficult to predict demand and market acceptance in
the rapidly evolving Web-based business information products and
services market. If the demand for our Web-based products does
not remain the same or continue to grow, whether due to, among
other factors, increased competition, lack of

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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
net income.


OUR SALES EFFORTS TO OUR TARGET MARKET MAY BE
LENGTHY, INVOLVE DELAYS, OR INVOLVE UNCERTAINTY, ALL OF WHICH
MAY ADVERSELY IMPACT OUR BUSINESS, OPERATING RESULTS, AND
FINANCIAL CONDITION. Selling our products and services to Global
5000 companies, our target market, 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 services, and they often require us to expend substantial
time, effort, and money to educate them about our products and
services. In addition, these sales efforts often require final
approval from our customers senior level management,
potentially resulting in delays to the sales cycle. Any of these
factors may extend the sales 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 operating results to vary significantly from quarter to
quarter and may have a material adverse impact on our business,
operating results, and financial condition.

ANNUALIZED CONTRACT VALUE MAY NOT BE AN ACCURATE
INDICATOR 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 products and 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 Group (a Reed Elsevier Plc
    subsidiary), The Dialog Corporation (a Thomson Corporation
    subsidiary), Factiva (a Dow Jones & Co. subsidiary), and
    Bureau Van Dijk Computer Services SA;
|
| |  | providers of company information, such as Thomson
    Financial, Inc. (a Thomson Corporation subsidiary), Market Guide
    Inc. (a Multex.com, Inc. subsidiary), Hemscott Group Ltd., and
    Hoovers, Inc. (a subsidiary of The Dun & Bradstreet
    Corporation);       
|
| |  | providers of sales, marketing, and credit
    information such as Dun & Bradstreet, Inc. (a subsidiary of
    The Dun & Bradstreet Corporation) and InfoUSA Inc.; and                                                                                                     
|
| |  | Web retrieval, Web portal companies,
    and other free or low-cost mass market on-line services, such as
    Yahoo! Inc., AOL-Time Warner, Inc., MarketWatch.com, Inc., 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 and
services 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 and services that are equal or
superior to our products or that achieve greater market
acceptance than our products and services. Ultimately, we may
lose customers to competitors if we are not able to satisfy
increasingly sophisticated customer requirements, improve
existing OneSource products and services, and develop new
products and services in a timely, economical fashion. In
addition, increased

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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 OPERATING RESULTS AND FINANCIAL CONDITION. 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 products and services.
If the market for subscription-based on-line business
information products and 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 OPERATING RESULTS AND FINANCIAL
CONDITION. 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 operating results and financial condition.

EXPANDING INTO INTERNATIONAL MARKETS WHERE WE
HAVE LIMITED PRIOR EXPERIENCE MAY MATERIALLY AND ADVERSELY
AFFECT OUR BUSINESS. We presently have offices located primarily
in the United States 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 may 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 materially and adversely affect 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 and
services such as our Web-based products and services. We have
experienced these effects in the last year as a result of the
recent economic slowdown and geopolitical conditions. 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
IN A TIMELY MANNER, CEASE DOING BUSINESS WITH US, OR REQUIRE US
TO SIGNIFICANTLY INCREASE OUR ROYALTY OBLIGATIONS, FUTURE SALES
OF OUR WEB-BASED PRODUCTS AND SERVICES MAY BE JEOPARDIZED, AND
THIS MAY MATERIALLY AND ADVERSELY AFFECT OUR BUSINESS, OPERATING
RESULTS, AND FINANCIAL CONDITION. We depend significantly on
information providers to supply accurate and reliable
information and data feeds to us on a timely basis. Our
Web-based products and services 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
and services may be negatively affected if our information
providers provide us with faulty or erroneous data that becomes

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integrated with our products and services. 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 services and may materially
and adversely affect 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 as a consequence
suffer significantly from potential adverse customer reaction,
litigation, negative publicity, loss of revenues, or 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
AND SERVICES MAY BE NEGATIVELY IMPACTED, AND OUR REPUTATION,
FUTURE SALES, OPERATING RESULTS, AND FINANCIAL CONDITION 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 and services may contain or develop errors or defects,
especially when first implemented and as our product and service
offerings increase in scope and complexity, that may be
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 and services; 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 and services. As a result, our activities may be
substantially disrupted; the introduction of new products,
services, and enhancements may be delayed; and our reputation,
future sales, operating results, and financial condition may be
adversely affected if these efforts are successful.

POTENTIAL GROWTH IN OUR FUTURE OPERATIONS MAY
STRAIN OUR MANAGERIAL AND FINANCIAL RESOURCES AND OPERATING
SYSTEMS. FAILURE TO SUCCESSFULLY MANAGE GROWTH, OR UNEXPECTED
DIFFICULTIES DURING EXPANSION, MAY MATERIALLY AND ADVERSELY
AFFECT OUR OPERATING RESULTS AND FINANCIAL CONDITION. We have
experienced growth in our operations and plan to pursue growth
opportunities as relate to Business Browser product line,
related software applications, and fee-based services,
particularly in our target market accounts. In order to support
such potential growth, we may need to: (i) implement and
modify relevant financial, operational, and management controls;
reporting systems; and procedures on a timely basis;
(ii) expand, train, and manage our employee base; and
(iii) alter the coordination among our staff responsible
for product and platform development, sales and marketing, and
finance and administration. If we are unable to accomplish any
of these objectives during a period of growth, our operating
results and financial condition may be materially and adversely
impacted.

WE MAY HAVE DIFFICULTY IDENTIFYING AND COMPETING
FOR ACQUISITION OPPORTUNITIES, AND THE TIME, ENERGY, AND
RESOURCES DEDICATED TO THESE ACQUISITION OPPORTUNITIES MAY
MATERIALLY AND ADVERSELY AFFECT OUR OPERATING RESULTS AND
FINANCIAL CONDITION. 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
materially and adversely affect our operating results and
financial condition.

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PURSUING AND COMPLETING ANY POTENTIAL
ACQUISITION(S) 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 materially and
adversely affect our operating results and financial condition.

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 integration of the operations,
    technologies, rights, products, services, and personnel of the
    acquired business(es);                                                                                          
|
| |  | difficulty in maintaining controls, procedures,
    and policies during the transition and integration;                                                                                                                                 
|
| |  | 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 stockholders from
    the issuance of additional equity securities;                                                                                                                                       
|
| |  | failure through the due diligence process to
    identify significant issues with product and service quality,
    product architecture, legal and financial contingencies, and
    product and service development, among other things;
|
| |  | 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 operating results 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 expense, 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;

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| |   |                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------
| |  | 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 our sales and marketing
efforts and our projected revenues do not meet our expectations,
then we are likely to experience a shortfall in our income from
operations 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 operating results and
financial condition by potentially subjecting us to significant
liabilities and negative publicity 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 products and services, if such claims were
to be asserted, with or without merit, they may have a material
adverse effect on our business, operating results, 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, operating results, 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, operating results, 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 subject us to litigation and materially and adversely
affect our competitive position.

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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, Service, and Marketing; Roy D.
Landon, our Senior Vice President and Chief Financial Officer;
Patti Purcell, our Senior Vice President, Products and
Solutions; and David J. DeSimone, our Chief Information
Technology Officer. 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 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 BRAND NAME, REPUTATION, AND 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 products and services. If our
reputation is damaged or if potential customers and employees
are not familiar with our products and 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
products and services and to successfully market our products
and services. If customers do not perceive our products and
services to be effective or high quality, our brand name,
reputation, and business may suffer.

LAWS, RULES, AND REGULATIONS WITH RESPECT TO
CORPORATE GOVERNANCE, REPORTING, AND DISCLOSURE MAY HINDER OUR
ABILITY TO ATTRACT AND/OR RETAIN CAPABLE BOARD MEMBERS, A CHIEF
EXECUTIVE OFFICER, AND A CHIEF FINANCIAL OFFICER, AND MAY RESULT
IN A REDUCTION IN THE NUMBER OF BOARD MEMBERS, WHICH MAY
MATERIALLY AND ADVERSELY AFFECT OUR BUSINESS, OPERATING RESULTS,
AND FINANCIAL CONDITION AND OUR ABILITY TO MEET LISTING
CRITERIA. In July 2002, President George W. Bush
signed the Sarbanes-Oxley Act of 2002 into law, and several new
rules and regulations were announced thereafter. Among other
things, the Sarbanes-Oxley Act of 2002 imposes new corporate
governance, reporting, and disclosure requirements; introduces
stricter independence and financial expertise standards for
audit committees; and imposes stiff penalties for securities
fraud. In addition, the United States Securities and Exchange
Commission and the Nasdaq National Market are considering
proposals on related corporate governance topics. The
Sarbanes-Oxley Act of 2002 and the related rules and regulations
will likely increase the scope, complexity and costs of our
corporate governance, reporting, and disclosure practices, and
may increase the risk of personal liability for our board
members, chief executive officer, and chief financial officer.
Consequently, it may become more difficult to attract and/or
retain such individuals, and may result in a decrease in the
number of board members, which may materially

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and adversely affect our business, operating
results, and financial condition and our ability to meet listing
criteria.


IF THE INTERNET BECOMES SUBJECT TO INCREASED
LEGISLATION AND GOVERNMENT REGULATION, USE OF THE INTERNET AS A
MEDIUM TO RECEIVE SUBSCRIPTION-BASED INFORMATION PRODUCTS AND
SERVICES MAY DECLINE, AND WE MAY BE SUBJECT TO LITIGATION,
EITHER OF WHICH MAY HAVE A MATERIAL AND ADVERSE EFFECT ON OUR
BUSINESS, OPERATING RESULTS, 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 products and 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 products and services occurs
primarily in the Commonwealth of Massachusetts, other states,
the United States, or foreign countries may attempt to regulate
our products and services or levy sales or other applicable
taxes on our Web-based products and services. 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, operating results, and financial condition.

IF REQUIREMENTS RELATED TO ACCOUNTING TREATMENT
FOR EMPLOYEE STOCK OPTIONS ARE MODIFIED, WE MAY BE FORCED TO
CHANGE OUR BUSINESS PRACTICES, WHICH MAY HINDER OUR ABILITY TO
RETAIN EXISTING EMPLOYEES AND ATTRACT HIGHLY QUALIFIED
CANDIDATES, WHICH MAY HAVE A NEGATIVE EFFECT ON OUR EARNINGS. We
currently account for the issuance of stock options under
Accounting Principles Board Opinion No. 25 (APB
Opinion No. 25), Accounting for Stock Issued to
Employees. If proposals currently under consideration by
accounting standards organizations and governmental authorities
are adopted, we may be required to treat the value of stock
options granted to employees as a compensation expense. As a
result, we may decide to reduce the number of stock options
granted to employees or to grant options to fewer employees.
This may affect our ability to retain existing employees and
attract highly qualified candidates, and increase the cash
compensation we may be required to pay these individuals. Such a
change may have a negative effect on our earnings.

SOME OF OUR STOCKHOLDERS MAY BE ABLE TO
SIGNIFICANTLY INFLUENCE THE OUTCOME OF MATTERS REQUIRING
STOCKHOLDER APPROVAL, WHICH MAY DELAY OR MAKE MORE DIFFICULT A
MERGER, TENDER OFFER, OR PROXY CONTEST, AND MAY ADVERSELY AFFECT
THE RIGHTS OF OUR STOCKHOLDERS. Our current directors, officers,
and greater than 10% stockholders together beneficially own a
significant portion of our outstanding shares of common stock.
While these stockholders do not hold a majority of our
outstanding common stock, they will be able to exercise
significant influence over matters requiring shareholder
approval, which may delay or make more difficult a merger,
tender offer, or proxy contest, and may adversely affect the
rights of our stockholders that may otherwise receive a premium
over the fair market value of our common stock.

PROVISIONS IN OUR RESTATED CERTIFICATE OF
INCORPORATION AND AMENDED AND RESTATED BY-LAWS CONTAIN
PROVISIONS THAT MAY HAVE THE EFFECT OF DELAYING OR PREVENTING
CERTAIN CORPORATE ACTIONS, WHICH MAY ADVERSELY AFFECT THE RIGHTS
OF OUR STOCKHOLDERS. Our Board of Directors is authorized to
issue up to 1,000,000 shares of preferred stock and to determine
the price, rights, preferences, privileges, and restrictions,
including voting rights, of those shares without further
approval by stockholders. Preferred stock may be issued with
voting, liquidation, dividend, and other rights superior to
those of common stock, without stockholder approval. The rights
of the holders of common stock will be subject to, and may be
adversely affected by, the rights of the holders of any
preferred stock that may be issued in the future. The issuance
of preferred stock may make it more difficult for a third party
to acquire, or may discourage a third party from acquiring, a
majority of our outstanding common stock. This may delay or make
more difficult a merger, tender offer, or

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proxy contest and may adversely affect the rights
of our stockholders that may otherwise receive a premium over
the fair market value of our common stock.


AS WE COMPLEMENT THE BUSINESS BROWSER PRODUCT
LINE WITH NEW PRODUCTS AND SERVICES, THIS MAY DIVERT MANAGEMENT
AND TECHNICAL ATTENTION AND FINANCIAL RESOURCES AND MAY NOT
PRODUCE THE DESIRED BUSINESS RESULTS. As we complement the
Business Browser product line with new business information
products and services, our management team and technical
personnel may spend a significant amount of time and management
and financial resources in such development and implementation.

Despite the investment of these management and
financial resources with respect to these efforts, the potential
new products and services may not produce the revenues,
earnings, or business results that we may anticipate for the
following reasons:



| |   |                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we may experience difficulty in developing and
    implementing products and services that integrate and operate
    effectively with our customers existing applications,
    business processes, and functions;
|
| |  | the market may not adopt these products and
    services as readily as we envision;                                                                                                                               
|
| |  | we may contract with certain third parties to
    provide content and/or supplement the products and services we
    provide, which may yield lower gross margins than our existing
    business;                 
|
| |  | we may experience delays in the development and
    implementation of these products and services; and                                                                                                            
|
| |  | the introduction of new services may require
    changes to accounting methods, policies and procedures.                                                                                                          

Any one or more of these factors may affect our
business, operating results, and financial condition, and this
makes the prediction of operating results on a quarterly basis
unreliable. As a result, we believe that period-to-period
comparisons of our historical operating results 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
operating results (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. 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,
rather than multiple foreign currencies. 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, 2002, 2001 and 2000. OneSource
does not engage in hedging activities.

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.
OneSource has no long-term debt obligations. As of
December 31, 2002, OneSource had $23.1 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 16 on page 34.

36



---



##### Table of Contents








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|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 2003 Annual Meeting of
Stockholders, which will be filed with the United States
Securities and Exchange Commission within 120 days after
December 31, 2002.






|         |                       
|-------- | ----------------------
|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 2003 Annual Meeting of Stockholders, which
will be filed with the United States Securities and Exchange
Commission within 120 days after December 31, 2002.






|         |                                                                   
|-------- | ------------------------------------------------------------------
|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
2003 Annual Meeting of Stockholders, which will be filed with
the United States Securities and Exchange Commission within
120 days after December 31, 2002.






|         |                                                   
|-------- | --------------------------------------------------
|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 2003 Annual Meeting of Stockholders,
which will be filed with the United States Securities and
Exchange Commission within 120 days after December 31,
2002.






|         |                        
|-------- | -----------------------
|Item 14. | Controls and Procedures

Evaluation of disclosure controls and procedures.
Based on their evaluation of OneSources disclosure
controls and procedures (as defined in Rules 13a-14(c) and
15(d)-14(c) under the Securities Exchange Act of 1934) as of a
date within 90 days of the filing of this annual report,
OneSources principal executive officer and principal
financial officer have concluded the following:
(i) OneSources disclosure controls and procedures are
effective to ensure that information required to be disclosed by
OneSource in reports that it files or submits under the
Securities Exchange Act of 1934 is recorded, processed,
summarized, and reported within time periods specified in
Securities and Exchange Commission rules and forms; and
(ii) OneSources disclosure controls and procedures
are effective to ensure that information required to be
disclosed by OneSource in reports that it files or submits under
the Securities Exchange Act of 1934 is accumulated and
communicated to OneSources management, including its
principal executive officer and principal financial officer, or
persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure.

Changes in internal controls. There were no
significant changes in OneSources internal controls or in
other factors that could significantly affect these controls
subsequent to the date of their evaluation. There were no
significant deficiencies or material weaknesses, and therefore
there were no corrective actions taken.






|         |                                           
|-------- | ------------------------------------------
|Item 15. | Principal Accountant Fees and
    Services

The information required by this Item is
incorporated by reference to the section entitled
Relationship With Auditors of OneSources Proxy
Statement for its 2003 Annual Meeting of Stockholders, which
will be filed with the United States Securities and Exchange
Commission within 120 days after December 31, 2002.

37



---



##### Table of Contents






PART IV






|         |                                                                     
|-------- | --------------------------------------------------------------------
|Item 16. | 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,
    2002 and 2001                                                           |  | F-2        
|Consolidated Statement of Income for the years
    ended December 31, 2002, 2001 and 2000                              |  | F-3        
|Consolidated Statement of Changes in
    Stockholders Equity for the years ended December 31,
    2002, 2001 and 2000 |  | F-4        
|Consolidated Statement of Cash Flows for the
    years ended December 31, 2002, 2001 and 2000                          |  | F-5        
|Notes to Consolidated Financial Statements                                                                             |  | F-6 to F-22



| |     |                               
| | --- | ------------------------------
| | (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

A current report on Form 8-K dated
November 6, 2002 was filed by OneSource on November 6,
2002 with the United States Securities and Exchange Commission
that reported that ValueAct Capital Partners purchased
3.5 million shares of OneSource common stock in a private
transaction from Information Partners Capital Fund and William
Blair Venture Partners, and that Peter H. Kamin was appointed to
OneSources Board of Directors.

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 United
States Securities and Exchange Commission in Washington, D.C.;
New York, New York; and Chicago, Illinois. Please call the
United States Securities and Exchange Commission at
1-800-SEC-0330 for further information on the public reference
rooms. United States 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.

38



---



##### 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.(filed as Exhibit 3.01 to the Annual Report on Form 10-K on
    March 27, 2002 and incorporated herein by reference.)                                                                          
|        | 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 22, 2002 (filed as Exhibit 10.1 to the
    Quarterly Report on Form 10-Q on August 14, 2002 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).                                                                                                             
|        | 10.13  |             |  | Registration Rights Agreement dated
    November 1, 2002 by and among the Registrant, ValueAct
    Capital Partners, L.P., ValueAct Capital Partners II, L.P., and
    ValueAct International, Ltd. (filed as Exhibit 10.1 to the
    Form 8-K on November 6, 2002, and incorporated herein
    by reference).
|        | 10.14  |             |  | Loan and Security Agreement, dated as of
    December 20, 2002, between Silicon Valley Bank and
    OneSource Information Services, Inc.                                                                                                                                                                      
|        | 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)                                                                                                                                                                                                                                                                
|        | 99.1   |             |  | Certification pursuant to 18 U.S.C.
    section 1350, as adopted pursuant to section 906 of the
    Sarbanes-Oxley Act of 2002                                                                                                                                                                                
|        | 99.2   |             |  | Certification pursuant to 18 U.S.C.
    section 1350, as adopted pursuant to section 906 of the
    Sarbanes-Oxley Act of 2002                                                                                                                                                                                



---



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

39



---



##### Table of Contents






SIGNATURES

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, Chief Executive Officer  
|
| | Date: March 27, 2003                

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



| |                                                      
| | -----------------------------------------------------
| | By: /s/ ROY D. LANDON                                
| |                                                      
| | Senior Vice President and Chief Financial
    Officer
|
| | Date: March 27, 2003                                 
|
| | By: /s/ HENRY ANCONA                                 
| |                                                      
| | Director                                             
|
| | Date: March 27, 2003                                 
|
| | By: /s/ CARL P. FISHER                               
| |                                                      
| | Director                                             
|
| | Date: March 27, 2003                                 
|
| | By: /s/ ROBERT J. MASSIE                             
| |                                                      
| | Director                                             
|
| | Date: March 27, 2003                                 

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

40



---



##### Table of Contents



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, 2003
|                                         
|/s/ ROY D. LANDON Roy D. Landon           |  | Senior Vice President and
    Chief Financial Officer
    (principal financial officer) |  | March 27, 2003
|                                         
|/s/ MARTIN KAHNMartin Kahn                |  | Chairman of the Board of Directors                                                      |  | March 27, 2003
|                                         
|/s/ CARL P. FISHER Carl P. Fisher         |  | Director                                                                                |  | March 27, 2003
|                                         
|/s/ HENRY ANCONA Henry Ancona             |  | Director                                                                                |  | March 27, 2003
|                                         
|/s/ ROBERT J. MASSIE Robert J. Massie     |  | Director                                                                                |  | March 27, 2003
|                                         
|/s/ PETER H. KAMIN Peter H. Kamin         |  | Director                                                                                |  | March 27, 2003

41



---



##### Table of Contents






CERTIFICATIONS

I, Daniel J. Schimmel, Chief Executive Officer of
OneSource Information Services, Inc., certify that:



| |     |                                                                                                                                                                                                                                                                                                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | I have reviewed this annual report on
    Form 10-K of OneSource Information Services, Inc.;                                                                                                                                                                                                                                                
|
| | (2) | Based on my knowledge, this annual report does
    not contain any untrue statement of a material fact or omit to
    state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were
    made, not misleading with respect to the period covered by this
    annual report;
|
| | (3) | Based on my knowledge, the financial statements,
    and other financial information included in this annual report,
    fairly present in all material respects the financial condition,
    results of operations and cash flows of the registrant as of,
    and for, the periods presented in this annual report;                       
|
| | (4) | The registrants other certifying officers
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant, and we have:                                                                                                      



| |     |                                                                                                                                                                                                                                                                                                             
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | Designed such disclosure controls and procedures
    to ensure that material information relating to the registrant,
    including its consolidated subsidiaries, is made known to us by
    others within those entities, particularly during the period in
    which this annual report is being prepared;
|
| | (b) | Evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date); and                                                                                                      
|
| | (c) | Presented in this annual report our conclusions
    about the effectiveness of the disclosure controls and
    procedures based on our evaluation as of the Evaluation Date;                                                                                                                                



| |     |                                                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (5) | The registrants other certifying officers
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of the
    registrants board of directors (or persons performing the
    equivalent function):



| |     |                                                                                                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | All significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | (b) | Any fraud, whether or not material, that involves
    management or other employees who have a significant role in the
    registrants internal controls; and                                                                                                                                                    



| |     |                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (6) | The registrants other certifying officers
    and I have indicated in this annual report whether or not there
    were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.



| |                        
| | -----------------------
| | /s/ DANIEL J. SCHIMMEL 
| |                        
| | Daniel J. Schimmel     
| | Chief Executive Officer

Date: March 27, 2003

42



---



##### Table of Contents



I, Roy D. Landon, Chief Financial Officer of
OneSource Information Services, Inc., certify that:



| |     |                                                                                                                                                                                                                                                                                                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | I have reviewed this annual report on
    Form 10-K of OneSource Information Services, Inc.;                                                                                                                                                                                                                                                
|
| | (2) | Based on my knowledge, this annual report does
    not contain any untrue statement of a material fact or omit to
    state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were
    made, not misleading with respect to the period covered by this
    annual report;
|
| | (3) | Based on my knowledge, the financial statements,
    and other financial information included in this annual report,
    fairly present in all material respects the financial condition,
    results of operations and cash flows of the registrant as of,
    and for, the periods presented in this annual report;                       
|
| | (4) | The registrants other certifying officers
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant, and we have:                                                                                                      



| |     |                                                                                                                                                                                                                                                                                                             
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | Designed such disclosure controls and procedures
    to ensure that material information relating to the registrant,
    including its consolidated subsidiaries, is made known to us by
    others within those entities, particularly during the period in
    which this annual report is being prepared;
|
| | (b) | Evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date); and                                                                                                      
|
| | (c) | Presented in this annual report our conclusions
    about the effectiveness of the disclosure controls and
    procedures based on our evaluation as of the Evaluation Date;                                                                                                                                



| |     |                                                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (5) | The registrants other certifying officers
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of the
    registrants board of directors (or persons performing the
    equivalent function):



| |     |                                                                                                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | All significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | (b) | Any fraud, whether or not material, that involves
    management or other employees who have a significant role in the
    registrants internal controls; and                                                                                                                                                    



| |     |                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (6) | The registrants other certifying officers
    and I have indicated in this annual report whether or not there
    were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.



| |                        
| | -----------------------
| | /s/ ROY D. LANDON      
| |                        
| | Roy D. Landon          
| | Chief Financial Officer

Date: March 27, 2003

43



---



##### 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 income,
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, 2002 and 2001, and the results of their
operations and their cash flows for each of the three years in
the period ended December 31, 2002 in conformity with
accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of
the Companys management; our responsibility is to express
an opinion on these financial statements based on our audits. We
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.

As discussed in Note 2 to these consolidated
financial statements, the Company changed its method of
accounting for the amortization of goodwill in accordance with
guidance provided by Statements of Financial Accounting
Standards No. 142, Goodwill and Other Intangible
Assets, in 2002.

/S/ PRICEWATERHOUSECOOPERS LLP

Boston, Massachusetts

January 27, 2003


F-1



---



##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.




CONSOLIDATED BALANCE SHEET

(In thousands, except share data)


|                                         |                                                                                                                                  |                                                                                                                                                                                                     |                                            |                      |     |        |        |        |     |        |        | 
|---------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | -------------------- | --- | ------ | ------ | ------ | --- | ------ | ------ | 
|                                         |                                                                                                                                  |                                                                                                                                                                                                    
|                                         |                                                                                                                                  | December 31,                                                                                                                                                                                       
|                                         |                                                                                                                                  |                                                                                                                                                                                                    
|                                         |                                                                                                                                  | 2002                                                                                                                                                                                                |                                            | 2001                
|                                         |                                                                                                                                  |                                                                                                                                                                                                     |                                            |                     
|ASSETS                                  
|Current assets:                          |                                                                                                                                  |                                                                                                                                                                                                     |                                            |                      |     |        |        |       
|                                         | Cash and cash equivalents                                                                                                        |                                                                                                                                                                                                     | $                                          | 23,096               |     |        | $      | 18,162 |    
|                                         | Accounts receivable, net of allowance for
    doubtful accounts of $299 and $770 at December 31, 2002 and
    2001, respectively |                                                                                                                                                                                                     |                                            | 16,499               |     |        |        | 16,925 |    
|                                         | Deferred royalties                                                                                                               |                                                                                                                                                                                                     |                                            | 2,873                |     |        |        | 3,133  |    
|                                         | Deferred commissions                                                                                                             |                                                                                                                                                                                                     |                                            | 1,644                |     |        |        | 1,342  |    
|                                         | Prepaid expenses and other current assets                                                                                        |                                                                                                                                                                                                     |                                            | 822                  |     |        |        | 380    |    
|                                         |                                                                                                                                  |                                                                                                                                                                                                     |                                            |                      |     |        |        |       
|                                         |                                                                                                                                  |                                                                                                                                                                                                     |                                            | Total current assets |     |        | 44,934 |        |     |        | 39,942 | 
|Property and equipment, net              |                                                                                                                                  |                                                                                                                                                                                                     | 3,629                                      |                      |     |        | 4,353  |       
|Goodwill                                 |                                                                                                                                  |                                                                                                                                                                                                     | 4,445                                      |                      |     |        | 4,978  |       
|Other intangible assets, net             |                                                                                                                                  |                                                                                                                                                                                                     | 1,217                                      |                      |     |        | 1,645  |       
|Restricted time deposit                  |                                                                                                                                  |                                                                                                                                                                                                     | 603                                        |                      |     |        | 603    |       
|Long-term deferred royalties             |                                                                                                                                  |                                                                                                                                                                                                     | 1,540                                      |                      |     |        | 1,026  |       
|Other assets, net                        |                                                                                                                                  |                                                                                                                                                                                                     | 2,430                                      |                      |     |        | 996    |       
|                                         |                                                                                                                                  |                                                                                                                                                                                                     |                                            |                      |     |        |        |       
|                                         |                                                                                                                                  |                                                                                                                                                                                                     | Total assets                               |                      | $   | 58,798 |        |        | $   | 53,543 |       
|                                         |                                                                                                                                  |                                                                                                                                                                                                     |                                            |                      |     |        |        |       
|LIABILITIES AND STOCKHOLDERS
    EQUITY
|Current liabilities:                     |                                                                                                                                  |                                                                                                                                                                                                     |                                            |                      |     |        |        |       
|                                         | Accounts payable                                                                                                                 |                                                                                                                                                                                                     | $                                          | 2,222                |     |        | $      | 1,734  |    
|                                         | Accrued compensation and benefits                                                                                                |                                                                                                                                                                                                     |                                            | 2,534                |     |        |        | 2,171  |    
|                                         | Accrued royalties                                                                                                                |                                                                                                                                                                                                     |                                            | 3,419                |     |        |        | 3,839  |    
|                                         | Accrued expenses                                                                                                                 |                                                                                                                                                                                                     |                                            | 2,857                |     |        |        | 2,655  |    
|                                         | Deferred revenues                                                                                                                |                                                                                                                                                                                                     |                                            | 30,257               |     |        |        | 27,144 |    
|                                         |                                                                                                                                  |                                                                                                                                                                                                     |                                            |                      |     |        |        |       
|                                         |                                                                                                                                  |                                                                                                                                                                                                     | Total current liabilities                  |                      |     | 41,289 |        |        |     | 37,543 |       
|                                         |                                                                                                                                  |                                                                                                                                                                                                     |                                            |                      |     |        |        |       
|Commitments (Note 15)                    |                                                                                                                                  |                                                                                                                                                                                                     |                                           |                      |     |        |       |       
|Stockholders equity:                    |                                                                                                                                  |                                                                                                                                                                                                     |                                            |                      |     |        |        |       
|                                         | Preferred stock, $0.01 par value:                                                                                                |                                                                                                                                                                                                     |                                            |                      |     |        |        |        |    
|                                         |                                                                                                                                  | 1,000,000 shares authorized; no shares issued and
    outstanding                                                                                                                                   |                                            |                      |    |        |        |        |    |       
|                                         | Common stock, $0.01 par value:                                                                                                   |                                                                                                                                                                                                     |                                            |                      |     |        |        |        |    
|                                         |                                                                                                                                  | 35,000,000 shares authorized; 13,287,453 shares
    issued and 11,681,741 shares outstanding at December 31,
    2002; 13,021,464 shares issued and 12,060,864 outstanding at
    December 31, 2001 |                                            |                      | 133 |        |        |        | 130 |       
|                                         | Additional paid-in capital                                                                                                       |                                                                                                                                                                                                     |                                            | 35,128               |     |        |        | 33,154 |    
|                                         | Unearned compensation                                                                                                            |                                                                                                                                                                                                     |                                            |                     |     |        |        | (77    | )  
|                                         | Accumulated deficit                                                                                                              |                                                                                                                                                                                                     |                                            | (5,856               | )   |        |        | (9,377 | )  
|                                         | Accumulated other comprehensive income                                                                                           |                                                                                                                                                                                                     |                                            | 437                  |     |        |        | 267    |    
|                                         | Treasury stock, at cost                                                                                                          |                                                                                                                                                                                                     |                                            | (12,333              | )   |        |        | (8,097 | )  
|                                         |                                                                                                                                  |                                                                                                                                                                                                     |                                            |                      |     |        |        |       
|                                         |                                                                                                                                  |                                                                                                                                                                                                     | Total stockholders equity                 |                      |     | 17,509 |        |        |     | 16,000 |       
|                                         |                                                                                                                                  |                                                                                                                                                                                                     |                                            |                      |     |        |        |       
|                                         |                                                                                                                                  |                                                                                                                                                                                                     | Total liabilities and stockholders equity |                      | $   | 58,798 |        |        | $   | 53,543 |       
|                                         |                                                                                                                                  |                                                                                                                                                                                                     |                                            |                      |     |        |        |       

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 INCOME


(In thousands, except per share
data)


|                                            |                                         |                                          |        |        |        |      |        |        |        |   |        |        |        |  
|------------------------------------------- | --------------------------------------- | ---------------------------------------- | ------ | ------ | ------ | ---- | ------ | ------ | ------ | - | ------ | ------ | ------ | -
|                                            |                                         |                                         
|                                            |                                         | Year ended December 31,                 
|                                            |                                         |                                         
|                                            |                                         | 2002                                     |        | 2001   |        | 2000
|                                            |                                         |                                          |        |        |        |     
|Revenues:                                   |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|                                            | Web-based product                       |                                          | $      | 55,709 |        |      | $      | 56,318 |        |   | $      | 47,275 |       
|                                            | CD Rom product and other                |                                          |        | 2,041  |        |      |        | 2,699  |        |   |        | 4,614  |       
|                                            |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|                                            |                                         |                                          | 57,750 |        |        |      | 59,017 |        |        |   | 51,889 |       
|                                            |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|Cost of revenues:                           |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|                                            | Web-based product                       |                                          |        | 16,394 |        |      |        | 16,431 |        |   |        | 15,536 |       
|                                            | CD Rom product and other                |                                          |        | 1,670  |        |      |        | 2,065  |        |   |        | 2,373  |       
|                                            |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|                                            |                                         |                                          | 18,064 |        |        |      | 18,496 |        |        |   | 17,909 |       
|                                            |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|                                            | Gross profit                            |                                          |        | 39,686 |        |      |        | 40,521 |        |   |        | 33,980 |       
|                                            |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|Operating expenses:                         |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|                                            | Selling and marketing                   |                                          |        | 16,467 |        |      |        | 18,447 |        |   |        | 20,519 |       
|                                            | Platform and product development        |                                          |        | 10,040 |        |      |        | 8,360  |        |   |        | 8,842  |       
|                                            | General and administrative              |                                          |        | 6,156  |        |      |        | 5,889  |        |   |        | 5,079  |       
|                                            | Restructuring                           |                                          |        |       |        |      |        | 660    |        |   |        |       |       
|                                            | Amortization of goodwill                |                                          |        |       |        |      |        | 1,020  |        |   |        | 1,043  |       
|                                            | Amortization of other intangible assets |                                          |        | 427    |        |      |        | 460    |        |   |        | 460    |       
|                                            |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|                                            |                                         | Total operating expenses                 |        |        | 33,090 |      |        |        | 34,836 |   |        |        | 35,943 |  
|                                            |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|                                            |                                         | Income (loss) from operations            |        |        | 6,596  |      |        |        | 5,685  |   |        |        | (1,963 | )
|Interest income                             |                                         |                                          | 490    |        |        |      | 903    |        |        |   | 978    |       
|Interest expense                            |                                         |                                          | (53    | )      |        |      | (50    | )      |        |   | (91    | )     
|Other income                                |                                         |                                          |       |        |        |      |       |        |        |   | 2,000  |       
|                                            |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|                                            |                                         | Income before provision for income taxes |        |        | 7,033  |      |        |        | 6,538  |   |        |        | 924    |  
|Provision for income taxes                  |                                         |                                          | 2,602  |        |        |      | 1,882  |        |        |   | 66     |       
|                                            |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|                                            |                                         | Net income                               |        | $      | 4,431  |      |        | $      | 4,656  |   |        | $      | 858    |  
|                                            |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|Basic net income per share                  |                                         | $                                        | 0.37   |        |        | $    | 0.37   |        |        | $ | 0.07   |       
|Diluted net income per share                |                                         | $                                        | 0.35   |        |        | $    | 0.34   |        |        | $ | 0.06   |       
|Weighted average common shares outstanding: |                                         |                                          |        |        |        |      |        |        |        |   |        |       
|                                            | Basic                                   |                                          |        | 11,859 |        |      |        | 12,424 |        |   |        | 11,509 |       
|                                            | Diluted                                 |                                          |        | 12,512 |        |      |        | 13,519 |        |   |        | 13,509 |       

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

F-3



---



##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.






CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS EQUITY


(In thousands, except share data)


|                                                                              |                      |              |            |            |  |          |     |              |  |               |        |                |  |               |      |               |  |           |         |        |  |   |     |   |  |  |           |   |  |   |         |   |  |   |        |   |  |   |       |       | 
|----------------------------------------------------------------------------- | -------------------- | ------------ | ---------- | ---------- |  | -------- | --- | ------------ |  | ------------- | ------ | -------------- |  | ------------- | ---- | ------------- |  | --------- | ------- | ------ |  | - | --- | - |  |  | --------- | - |  | - | ------- | - |  | - | ------ | - |  | - | ----- | ----- | 
|                                                                              |                      |              |            |            |  |          |     |              |  | Accumulated   |        |                |  | Total         |      |              
|                                                                              |                      | Common Stock |            | Additional |  |          |     |              |  | Other         |        | Treasury Stock |  | Stockholders |      |              
|                                                                              |                      |              |            | Paid-in    |  | Unearned |     | Accumulated  |  | Comprehensive |        |                |  | Equity        |      | Comprehensive
|                                                                              |                      | Shares       |            | Amount     |  | Capital  |     | Compensation |  | Deficit       |        | Income (loss)  |  | Shares        |      | Amount        |  | (deficit) |         | Income
|                                                                              |                      |              |            |            |  |          |     |              |  |               |        |                |  |               |      |               |  |           |         |       
|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 stock options                                                 |                      |              |            |            |  |          |     |              |  |               | 865    |                |  |               |      |               |  |           |         |        |  |   |     |   |  |  |           |   |  |   |         |   |  |   | 865    |   |  |   |       |      
|                                                                              |                      |              |            |            |  |          |     |              |  |               |        |                |  |               |      |               |  |           |         |        |  |   |     |   |  |  |           |   |  |   |         |   |  |   |        |   |  |   |       |      
|Balance, December 31, 2001                                                    |                      |              | 13,021,464 |            |  |          | 130 |              |  |               | 33,154 |                |  |               | (77  | )             |  |           | (9,377  | )      |  |   | 267 |   |  |  | 960,600   |   |  |   | (8,097  | ) |  |   | 16,000 |   |  |   |       |      
|Comprehensive income:                                                         |                      |              |            |            |  |          |     |              |  |               |        |                |  |               |      |               |  |           |         |        |  |   |     |   |  |  |           |   |  |   |         |   |  |   |        |   |  |   |       |      
|Net income                                                                    |                      |              |            |            |  |          |     |              |  |               |        |                |  |               |      |               |  |           | 4,431   |        |  |   |     |   |  |  |           |   |  |   |         |   |  |   | 4,431  |   |  |   | 4,431 |      
|Foreign currency translation adjustment                                       |                      |              |            |            |  |          |     |              |  |               |        |                |  |               |      |               |  |           |         |        |  |   | 170 |   |  |  |           |   |  |   |         |   |  |   | 170    |   |  |   | 170   |      
|                                                                              |                      |              |            |            |  |          |     |              |  |               |        |                |  |               |      |               |  |           |         |        |  |   |     |   |  |  |           |   |  |   |         |   |  |   |        |   |  |   |       |      
|                                                                              | Comprehensive income |              |            |            |  |          |     |              |  |               |        |                |  |               |      |               |  |           |         |        |  |   |     |   |  |  |           |   |  |   |         |   |  |   |        |   |  |   | $     | 4,601 | 
|                                                                              |                      |              |            |            |  |          |     |              |  |               |        |                |  |               |      |               |  |           |         |        |  |   |     |   |  |  |           |   |  |   |         |   |  |   |        |   |  |   |       |      
|Amortization of unearned compensation relating to
    grants of stock options |                      |              |            |            |  |          |     |              |  |               |        |                |  |               | 77   |               |  |           |         |        |  |   |     |   |  |  |           |   |  |   |         |   |  |   | 77     |   |  |   |       |      
|Issuance of common stock pursuant to exercise of
    options                  |                      |              | 238,327    |            |  |          | 3   |              |  |               | 471    |                |  |               |      |               |  |           | (858    | )      |  |   |     |   |  |  | (150,199  | ) |  |   | 1,157   |   |  |   | 773    |   |  |   |       |      
|Issuance of common stock pursuant to the employee
    stock purchase plan     |                      |              | 27,662     |            |  |          |    |              |  |               | 175    |                |  |               |      |               |  |           | (52     | )      |  |   |     |   |  |  | (22,839   | ) |  |   | 179     |   |  |   | 302    |   |  |   |       |      
|Repurchase of common stock                                                    |                      |              |            |            |  |          |     |              |  |               |        |                |  |               |      |               |  |           |         |        |  |   |     |   |  |  | 818,150   |   |  |   | (5,572  | ) |  |   | (5,572 | ) |  |   |       |      
|Tax benefits of stock options                                                 |                      |              |            |            |  |          |     |              |  |               | 1,328  |                |  |               |      |               |  |           |         |        |  |   |     |   |  |  |           |   |  |   |         |   |  |   | 1,328  |   |  |   |       |      
|                                                                              |                      |              |            |            |  |          |     |              |  |               |        |                |  |               |      |               |  |           |         |        |  |   |     |   |  |  |           |   |  |   |         |   |  |   |        |   |  |   |       |      
|Balance, December 31, 2002                                                    |                      |              | 13,287,453 |            |  | $        | 133 |              |  | $             | 35,128 |                |  | $             |     |               |  | $         | (5,856  | )      |  | $ | 437 |   |  |  | 1,605,712 |   |  | $ | (12,333 | ) |  | $ | 17,509 |   |  |   |       |      
|                                                                              |                      |              |            |            |  |          |     |              |  |               |        |                |  |               |      |               |  |           |         |        |  |   |     |   |  |  |           |   |  |   |         |   |  |   |        |   |  |   |       |      

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,                                                      
|                                                                 |                                                                                           |                                                                              
|                                                                 |                                                                                           | 2002                                                                          |                                   | 2001   |        | 2000 
|                                                                 |                                                                                           |                                                                               |                                   |        |        |      
|Increase (Decrease) in Cash and Cash Equivalents                 |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|Cash flows relating to operating activities:                     |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|                                                                 | Net income                                                                                |                                                                               | $                                 | 4,431  |        |       | $      | 4,656  |        |        | $      | 858    |       
|                                                                 | Adjustments to reconcile net income to net cash
    provided
    by operating activities: |                                                                               |                                   |        |        |       |        |        |        |        |        |        |       
|                                                                 |                                                                                           | Depreciation and amortization                                                 |                                   |        | 3,152  |       |        |        | 3,067  |        |        |        | 2,521  |       
|                                                                 |                                                                                           | Amortization of goodwill                                                      |                                   |        |       |       |        |        | 1,020  |        |        |        | 1,043  |       
|                                                                 |                                                                                           | Amortization of other intangible assets                                       |                                   |        | 427    |       |        |        | 460    |        |        |        | 460    |       
|                                                                 |                                                                                           | Amortization of unearned compensation relating to
    grants of stock options |                                   |        | 77     |       |        |        | 97     |        |        |        | 97     |       
|                                                                 |                                                                                           | Tax benefits of stock options                                                 |                                   |        | 1,328  |       |        |        | 865    |        |        |        |       |       
|                                                                 |                                                                                           | Loss on disposal of fixed assets                                              |                                   |        | 7      |       |        |        | 23     |        |        |        |       |       
|                                                                 |                                                                                           | Changes in operating assets and liabilities:                                  |                                   |        |        |       |        |        |        |        |        |        |        |       
|                                                                 |                                                                                           |                                                                               | Accounts receivable               |        |        | 864   |        |        |        | 2,413  |        |        |        | (5,225 | )
|                                                                 |                                                                                           |                                                                               | Deferred royalties                |        |        | 260   |        |        |        | 2,036  |        |        |        | 389    |  
|                                                                 |                                                                                           |                                                                               | Deferred commissions              |        |        | (302  | )      |        |        | 771    |        |        |        | (445   | )
|                                                                 |                                                                                           |                                                                               | Prepaid expenses and other assets |        |        | (518  | )      |        |        | (65    | )      |        |        | 1      |  
|                                                                 |                                                                                           |                                                                               | Long-term deferred royalties      |        |        | (514  | )      |        |        | (1,026 | )      |        |        |       |  
|                                                                 |                                                                                           |                                                                               | Accounts payable                  |        |        | 460   |        |        |        | (95    | )      |        |        | 433    |  
|                                                                 |                                                                                           |                                                                               | Accrued compensation and benefits |        |        | 391   |        |        |        | (1,269 | )      |        |        | 1,007  |  
|                                                                 |                                                                                           |                                                                               | Accrued royalties                 |        |        | (420  | )      |        |        | (1,655 | )      |        |        | (266   | )
|                                                                 |                                                                                           |                                                                               | Accrued expenses                  |        |        | 734   |        |        |        | 22     |        |        |        | 274    |  
|                                                                 |                                                                                           |                                                                               | Deferred revenues                 |        |        | 2,302 |        |        |        | (1,890 | )      |        |        | 5,472  |  
|                                                                 |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|                                                                 |                                                                                           | Net cash provided by operating activities                                     |                                   |        | 12,679 |       |        |        | 9,430  |        |        |        | 6,619  |       
|                                                                 |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|Cash flows relating to investing activities:                     |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|                                                                 | Proceeds from restricted time deposits                                                    |                                                                               |                                   |       |        |       |        |       |        |        |        | 100    |       
|                                                                 | Purchases of property and equipment                                                       |                                                                               |                                   | (1,872 | )      |       |        | (1,843 | )      |        |        | (4,014 | )     
|                                                                 | Capitalization of software development costs                                              |                                                                               |                                   | (1,872 | )      |       |        | (759   | )      |        |        | (530   | )     
|                                                                 |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|                                                                 |                                                                                           | Net cash used by investing activities                                         |                                   |        | (3,744 | )     |        |        | (2,602 | )      |        |        | (4,444 | )     
|                                                                 |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|Cash flows relating to financing activities:                     |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|                                                                 | Issuance of stock pursuant to stock options and
    employee stock purchase plan          |                                                                               |                                   | 1,075  |        |       |        | 1,988  |        |        |        | 1,823  |       
|                                                                 | Repurchase of common stock                                                                |                                                                               |                                   | (5,572 | )      |       |        | (8,097 | )      |        |        |       |       
|                                                                 | Repayment of capital lease obligations                                                    |                                                                               |                                   |       |        |       |        | (33    | )      |        |        | (201   | )     
|                                                                 |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|                                                                 |                                                                                           | Net cash provided (used) by financing
    activities                          |                                   |        | (4,497 | )     |        |        | (6,142 | )      |        |        | 1,622  |       
|                                                                 |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|Effect of exchange rate changes on cash and cash
    equivalents |                                                                                           |                                                                               | 496                               |        |        |       | 138    |        |        |        | (57    | )     
|                                                                 |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|Increase in cash and cash equivalents                            |                                                                                           |                                                                               | 4,934                             |        |        |       | 824    |        |        |        | 3,740  |       
|Cash and cash equivalents, beginning of year                     |                                                                                           |                                                                               | 18,162                            |        |        |       | 17,338 |        |        |        | 13,598 |       
|                                                                 |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|Cash and cash equivalents, end of year                           |                                                                                           | $                                                                             | 23,096                            |        |        | $     | 18,162 |        |        | $      | 17,338 |       
|                                                                 |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|Supplemental disclosure of cash flow information:                |                                                                                           |                                                                               |                                   |        |        |       |        |        |        |        |        |       
|                                                                 | Cash paid for interest                                                                    |                                                                               | $                                 | 32     |        |       | $      | 1      |        |        | $      | 16     |       
|                                                                 | Cash paid for income taxes                                                                |                                                                               |                                   | 411    |        |       |        | 333    |        |        |        | 73     |       

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

F-5



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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 primarily 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.



| |                                       
| | --------------------------------------
| | Deferred Royalties and
    Commissions

Deferred royalties and commissions include 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, 2002 and 2001, deferred costs
consisted of $1.6 million and $1.3 million,
respectively, related to sales commissions and $4.4 million
and $4.2 million, respectively, related to royalties.



| |                          
| | -------------------------
| | Cash and Cash Equivalents

Cash equivalents consist of money market funds
with original maturities of three months or less at the date of
purchase and are stated at cost, which approximates fair market
value. Financial institutions with strong credit ratings manage
these funds. Accordingly, the investments are subject to minimal
credit and market risks. At December 31, 2002 and 2001,
cash equivalents totaled $21.3 million and
$16.4 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.



| |                  
| | -----------------
| | Advertising Costs

OneSource recognizes advertising expense as
incurred. Advertising expense was $78,000, $58,000 and $87,000
for the years ended December 31, 2002, 2001 and 2000,
respectively.

F-6



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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |                                         
| | ----------------------------------------
| | Goodwill and Other Intangible
    Assets

Intangible assets consist primarily of goodwill,
trademark, non-compete agreement, subscriber list and a
database. Intangible assets, excluding goodwill, are amortized
using the straight-line method over periods of three to seven
years, based on the estimated useful life. The carrying value of
other 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. For other intangible assets excluding
goodwill, OneSource determines whether an impairment has
occurred based on gross expected future cash 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 OneSource considers important and 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 SFAS No. 142,
Goodwill and Other Intangible Assets, OneSource
ceased amortizing goodwill as of January 1, 2002 and will
annually review the goodwill for potential impairment during the
third quarter, as well as on an event-driven basis, using a fair
value approach. Since OneSource constitutes one reporting unit
under SFAS No. 142, its fair value, which equals its market
capitalization based on the closing price of its common stock as
quoted on the Nasdaq National Market, is compared to its net
assets, which includes the carrying value of goodwill. If market
capitalization exceeds net assets, it is determined that no
impairment has occurred and no adjustment is required.



| |                                                                    
| | -------------------------------------------------------------------
| | 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. 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. Examples of software development projects are software
platforms used in OneSource products and programs used for its
proprietary classification system. At December 31, 2002 and
2001, capitalized software development costs pursuant to
SOP 98-1, net of accumulated amortization, was
approximately $2,250,000 and $912,000, respectively, and was
recorded in other long-term assets. Capitalized software
development costs are amortized over three years, using the
straight-line method. For the years ended December 31,
2002, 2001 and 2000, amortization of capitalized software
development costs amounted to approximately $527,000, $460,000
and $224,000, respectively.



| |                      
| | ---------------------
| | Financial Instruments

The carrying amounts reflected in the
consolidated balance sheet for cash and cash equivalents,
restricted time deposits, and accounts receivable approximate
their fair value due to the short-term maturities of these
instruments. OneSource does not engage in off-balance sheet
transactions.



| |                             
| | ----------------------------
| | Concentration of Credit Risk

Financial instruments, which potentially subject
OneSource 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, 2002 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.

F-7



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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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
OneSources customer base is geographically widespread and
is highly diversified. As of December 31, 2002 and 2001,
OneSources single largest outstanding accounts receivable
balance represented 4% and 6%, respectively, of its total
outstanding accounts receivable. No single customer accounted
for 3% or more of annual revenues for the years ended
December 31, 2002, 2001 or 2000.



| |                                            
| | -------------------------------------------
| | Accounting for Stock-Based
    Compensation

OneSource accounts for stock-based compensation
to employees in accordance with APB Opinion No. 25,
Accounting for Stock Issued to Employees,
FIN 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.

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 net income (loss) per share on a pro forma
basis would be as follows:

|                                     |                                                                                                                                             |                                 |   |        |   |      |   |        |   |  |   |        |  
|------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------- | - | ------ | - | ---- | - | ------ | - |  | - | ------ | -
|                                     |                                                                                                                                             |                                
|                                     |                                                                                                                                             | Year ended December 31,        
|                                     |                                                                                                                                             |                                
|                                     |                                                                                                                                             | 2002                            |   | 2001   |   | 2000
|                                     |                                                                                                                                             |                                 |   |        |   |     
|                                     |                                                                                                                                             |                                
|                                     |                                                                                                                                             | (In thousands, except per share
|                                     |                                                                                                                                             | data)                          
|Net income (loss):                   |                                                                                                                                             |                                 |   |        |   |      |   |        |   |  |   |       
|                                     | As reported                                                                                                                                 |                                 | $ | 4,431  |   |      | $ | 4,656  |   |  | $ | 858    |  
|                                     | Add: Stock based employee compensation expense
    included in reported net income, net of related tax effects                              |                                 |   | 77     |   |      |   | 97     |   |  |   | 97     |  
|                                     | Less: Stock based employee compensation expense
    determined under fair value based method for all awards, net of
    related tax effects |                                 |   | (2,375 | ) |      |   | (1,779 | ) |  |   | (1,169 | )
|                                     |                                                                                                                                             |                                 |   |        |   |      |   |        |   |  |   |       
|                                     | Pro forma net income (loss)                                                                                                                 |                                 |   | 2,133  |   |      |   | 2,974  |   |  |   | (214   | )
|                                    
|Basic net income (loss) per share:   |                                                                                                                                             |                                 |   |        |   |      |   |        |   |  |   |       
|                                     | As reported                                                                                                                                 |                                 | $ | 0.37   |   |      | $ | 0.37   |   |  | $ | 0.07   |  
|                                     | Pro forma                                                                                                                                   |                                 | $ | 0.18   |   |      | $ | 0.24   |   |  | $ | (0.02  | )
|                                    
|Diluted net income (loss) per share: |                                                                                                                                             |                                 |   |        |   |      |   |        |   |  |   |       
|                                     | As reported                                                                                                                                 |                                 | $ | 0.35   |   |      | $ | 0.34   |   |  | $ | 0.06   |  
|                                     | Pro forma                                                                                                                                   |                                 | $ | 0.17   |   |      | $ | 0.22   |   |  | $ | (0.02  | )

F-8



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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
Statement of Standards Financial Accounting No. 128
(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 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 income.



| |                 
| | ----------------
| | 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 June 2001, the FASB issued SFAS No. 143,
Accounting for Asset Retirement Obligations, which
is scheduled to become effective as of 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 became effective as of
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 has determined that the adoption
of SFAS No. 144 had no impact on its financial position and
results of operations.

In June 2002, the FASB issued
SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities, which was effective for
exit or disposal activities initiated after December 31,
2002. SFAS No. 146 addresses financial accounting and
reporting for costs associated with exit or disposal activities
and supersedes Emerging Issues Task Force Issue No. 94-3,
Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring). OneSource does not
expect that the adoption of SFAS No. 146 will have a
significant impact on its financial position and results of
operations.

In November 2002, the FASB issued FIN 45
Guarantors Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of
Others an interpretation of FASB Statements No. 5, 57, and
107 and rescission of FASB Interpretation No. 34. FIN
45 requires that a guarantor recognize,

F-9



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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

at the inception of a guarantee, a liability for
the fair value of the obligation undertaken by issuing the
guarantee. FIN 45 also requires additional disclosures to be
made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees it has
issued. The accounting requirements for the initial recognition
of guarantees are applicable on a prospective basis for
guarantees issued or modified after December 31, 2002. The
disclosure requirements are effective for all guarantees
outstanding, regardless of when they were issued or modified,
during the first quarter of fiscal 2003. OneSource does not
expect the adoption of FIN 45 will have a significant
impact on its financial position and results of operations. The
following is a summary of provisions of OneSources
agreements that OneSource has determined are within the scope of
FIN 45:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | OneSources agreements with OneSource
    product customers, third party information and technology
    providers, and vendors include standard indemnification
    provisions. Under these agreements, OneSource generally agrees
    to defend, indemnify, and hold harmless the indemnified party
    with respect to any third party claim that the OneSource
    product, excluding any data or technology provided by the
    indemnified party, infringes a United States or United Kingdom
    patent, copyright, trade secret, or other proprietary right. The
    terms of these indemnification provisions are generally
    perpetual after execution of the agreement. The maximum
    potential amount of future payments OneSource may be required to
    make under these indemnification provisions is unlimited.
    OneSource has never incurred costs to defend lawsuits or settle
    actions related to these indemnification provisions. As a
    result, OneSource believes that the estimated fair market value
    of these indemnification provisions is minimal. Accordingly,
    OneSource does not have any liabilities recorded related to
    these provisions as of December 31, 2002.
|
| | OneSources agreements with OneSource
    product customers also include standard warranty provisions.
    OneSource warrants that it has the right to license the
    OneSource product line to customers, but does not warrant the
    accuracy, adequacy, completeness, or timeliness of Business
    Browser content or the OneSource product. If necessary,
    OneSource would provide for the estimated cost of product
    warranties based on specific warranty claims and claim history.
    However, OneSource has never incurred expense under its product
    warranties. As a result, OneSource believes that the estimated
    fair market value of this warranty provision is minimal.
    Accordingly, OneSource does not have any liabilities recorded as
    relate to this provision as of December 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                      

In November 2002, the Emerging Issues Task Force
issue reached a consensus on EITF Issue 00-21,
Revenue Arrangements with Multiple Deliverables.
EITF Issue 00-21 addresses revenue recognition on
arrangements encompassing multiple elements that are delivered
at different points in time, defining criteria that must be met
for elements to be considered to be a separate unit of
accounting. If an element is determined to be a separate unit of
accounting, the revenue for the element is recognized at the
time of delivery. OneSource does not expect that the adoption of
EITF Issue 00-21 will have a material impact on its
results of operations or financial position.

In December 2002, the FASB issued
SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure 
An Amendment of FAS 123, which becomes effective for
interim and fiscal periods ending after December 31, 2002.
SFAS No. 148 amends SFAS No. 123,
Accounting for Stock-Based Compensation, to provide
alternative methods of transition for a voluntary change to the
fair value based method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure
requirements of SFAS No. 123 to require prominent
disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee
compensation and the effect of the method used on reported
results. OneSource does not expect that the adoption of
SFAS No. 148 will have a significant impact on its
financial position and results of operations.

In January 2003, the FASB issued FIN 46,
Consolidation of Variable Interest Entities  an
interpretation of ARB No. 51. FIN 46 addresses how to
identify variable interest entities and how an enterprise
assesses its interests in a variable interest entity to decide
whether to consolidate that entity. The requirements

F-10



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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

of FIN 46 apply to all variable interest entities
created after January 31, 2003, and to variable interest
entities in which an enterprise obtains an interest after that
date. It applies in the first fiscal year or interim period
beginning after June 15, 2003 to variable interest entities
in which an enterprise holds a variable interest that it
acquired before February 1, 2003. OneSource does not expect
that the adoption of FIN 46 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
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).
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

As of January 1, 2002, OneSource adopted
SFAS No. 142, Goodwill and Other Intangible
Assets. Under SFAS No. 142, goodwill and certain
other intangible assets with indefinite lives are no longer
amortized, but instead are reviewed for impairment annually, or
more frequently if impairment indicators arise.

In connection with the adoption of
SFAS No. 142, OneSource was required to perform a
transitional impairment assessment of goodwill within six months
of adoption of this standard. SFAS No. 142 requires
that OneSource identify its reporting units and determine the
carrying value of each of those reporting units by assigning
assets and liabilities, including existing goodwill and
intangible assets, to those reporting units. OneSource has
concluded that it currently has one reporting unit, and has
assigned the entire balance of goodwill to this reporting unit
for purposes of performing the transitional impairment test. The
fair value of this reporting unit was determined using
OneSources market capitalization based on the closing
price of its common stock as quoted on the Nasdaq National
Market. OneSource completed its transitional impairment
assessment of goodwill during the first quarter of 2002, and
determined that goodwill was not impaired. OneSource performed
its annual goodwill impairment test during the third quarter of
2002, and determined that goodwill was not impaired as
OneSources fair value exceeded the net assets of the
reporting unit, including the carrying value of goodwill.
OneSource will continue to perform its annual goodwill
impairment test during the third quarter of each fiscal year as
well as on an event-driven basis, as required under
SFAS No. 142.

F-11



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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table reflects the unaudited
adjusted net income of OneSource, giving effect to
SFAS No. 142 as if it were adopted on January 1,
2001:

|                                           |             |                       |       |      |  |   |       |      | 
|------------------------------------------ | ----------- | --------------------- | ----- | ---- |  | - | ----- | ---- | 
|                                           |             |                      
|                                           |             | December 31,         
|                                           |             |                      
|                                           |             | 2002                  |       | 2001
|                                           |             |                       |       |     
|                                           |             |                      
|                                           |             | (In thousands, except
|                                           |             | net income per share)
|Net income, as reported                    |             | $                     | 4,431 |      |  | $ | 4,656 |     
|Add back: amortization expense of goodwill |             |                       |      |      |  |   | 1,020 |     
|                                           |             |                       |       |      |  |   |       |     
|Net income, as adjusted                    |             | $                     | 4,431 |      |  | $ | 5,676 |     
|                                           |             |                       |       |      |  |   |       |     
|Basic net income per share:                |             |                       |       |      |  |   |       |     
|                                           | As reported |                       | $     | 0.37 |  |   | $     | 0.37 | 
|                                           | As adjusted |                       | $     | 0.37 |  |   | $     | 0.46 | 
|Diluted net income per share:              |             |                       |       |      |  |   |       |     
|                                           | As reported |                       | $     | 0.35 |  |   | $     | 0.34 | 
|                                           | As adjusted |                       | $     | 0.35 |  |   | $     | 0.42 | 

Other intangible assets consist of the following:

|                      |  |                   |       |                   |  |          |        |          |  |              |       |          |  |   |       |  |  |   |        |   |  |   |       | 
|--------------------- |  | ----------------- | ----- | ----------------- |  | -------- | ------ | -------- |  | ------------ | ----- | -------- |  | - | ----- |  |  | - | ------ | - |  | - | ----- | 
|                      |  |                   |       |                  
|                      |  | December 31, 2002 |       | December 31, 2001
|                      |  |                   |       |                  
|                      |  |                  
|                      |  | (In thousands)   
|                      |  | Gross             |       |                   |  | Net      |        | Gross    |  |              |       | Net     
|                      |  | Carrying          |       | Accumulated       |  | Carrying |        | Carrying |  | Accumulate   |       | Carrying
|                      |  | Amount            |       | Amortization      |  | Amount   |        | Amount   |  | Amortization |       | Amount  
|                      |  |                   |       |                   |  |          |        |          |  |              |       |         
|Non-compete agreement |  | $                 | 400   |                   |  | $        | (400   | )        |  | $            |      |          |  | $ | 400   |  |  | $ | (300   | ) |  | $ | 100   | 
|Subscriber list       |  |                   | 1,150 |                   |  |          | (516   | )        |  |              | 634   |          |  |   | 1,150 |  |  |   | (357   | ) |  |   | 793   | 
|Database              |  |                   | 986   |                   |  |          | (458   | )        |  |              | 528   |          |  |   | 986   |  |  |   | (317   | ) |  |   | 669   | 
|Trademark             |  |                   | 145   |                   |  |          | (90    | )        |  |              | 55    |          |  |   | 145   |  |  |   | (62    | ) |  |   | 83    | 
|                      |  |                   |       |                   |  |          |        |          |  |              |       |          |  |   |       |  |  |   |        |   |  |   |       | 
|                      |  | $                 | 2,681 |                   |  | $        | (1,464 | )        |  | $            | 1,217 |          |  | $ | 2,681 |  |  | $ | (1,036 | ) |  | $ | 1,645 | 
|                      |  |                   |       |                   |  |          |        |          |  |              |       |          |  |   |       |  |  |   |        |   |  |   |       | 

For the years ended December 31, 2002, 2001
and 2000, amortization of goodwill was zero, $1.0 million
and $1.0 million, respectively. For the years ended
December 31, 2002, 2001 and 2000, amortization expense of
other intangible assets was $0.4 million,
$0.5 million, and $0.5 million, respectively. The
following table summarizes estimated future amortization expense
related to other intangible assets recorded at December 31,
2002 for the periods indicated:

|             |  |                |       | 
|------------ |  | -------------- | ----- | 
|             |  | Estimated     
|Year ending  |  | Amortization  
|December 31, |  | Expense       
|             |  |               
|             |  | (In thousands)
|2003         |  | $              | 327   | 
|2004         |  |                | 327   | 
|2005         |  |                | 299   | 
|2006         |  |                | 264   | 
|             |  |                |       | 
|             |  | $              | 1,217 | 
|             |  |                |       | 

F-12



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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The changes in the carrying value of goodwill for
the years ended December 31, 2001 and 2002 are as follows:

|                                                                                             |  |                |        |  
|-------------------------------------------------------------------------------------------- |  | -------------- | ------ | -
|                                                                                             |  | Carrying      
|                                                                                             |  | Value         
|                                                                                             |  |               
|                                                                                             |  | (In thousands)
|Balance as of December 31, 2000                                                              |  | $              | 5,998  |  
|Less: amortization of goodwill                                                               |  |                | (1,020 | )
|                                                                                             |  |                |        |  
|Balance as of December 31, 2001                                                              |  |                | 4,978  |  
|Less: tax benefit as a result of utilization of
    acquired net operating loss carryforward |  |                | (533   | )
|                                                                                             |  |                |        |  
|Balance as of December 31, 2002                                                              |  | $              | 4,445  |  
|                                                                                             |  |                |        |  

5.     Property and
Equipment

Property and equipment consists of the following:

|                                                |  |                |        |      |  |   |        |  
|----------------------------------------------- |  | -------------- | ------ | ---- |  | - | ------ | -
|                                                |  |               
|                                                |  | December 31,  
|                                                |  |               
|                                                |  | 2002           |        | 2001
|                                                |  |                |        |     
|                                                |  |               
|                                                |  | (In thousands)
|Office and computer equipment                   |  | $              | 10,825 |      |  | $ | 9,144  |  
|Furniture and fixtures                          |  |                | 532    |      |  |   | 532    |  
|                                                |  |                |        |      |  |   |        |  
|                                                |  |                | 11,357 |      |  |   | 9,676  |  
|Less: accumulated depreciation and amortization |  |                | (7,728 | )    |  |   | (5,323 | )
|                                                |  |                |        |      |  |   |        |  
|                                                |  | $              | 3,629  |      |  | $ | 4,353  |  
|                                                |  |                |        |      |  |   |        |  

During 2002 and 2001, OneSource retired $207,000
and $1,523,000, respectively, of fully depreciated property and
equipment. Total depreciation expense for the years ended
December 31, 2002, 2001 and 2000 was $2.6 million,
$2.6 million, and $2.3 million, respectively.

6.     Long-Term
Debt

In December 2002, OneSource entered into a loan
and security agreement with Silicon Valley Bank permitting
borrowings of up to $10.0 million . The loan and security
agreement represents a working capital revolving line of credit
and an equipment line of credit for up to $5.0 million each
and is effective for one year from the date of signing.
OneSource has granted the bank a security interest in
substantially all the assets of the company as collateral.

Borrowings under the working capital line of
credit are at the prime interest rate, plus 0.25%, and
borrowings under the equipment line of credit is are at the
prime interest rate, plus 0.50%. The equipment line of credit
has two draw down periods that end on March 31, 2003 and
September 30, 2003. Repayment of the equipment line of
credit is over 36 months, commencing at the end of each
draw-down period. The working capital line of credit matures one
year from the date of closing. The draw-down amount for the
working capital line is based on 80% of OneSources
eligible domestic accounts receivable that are less than
90 days old. Once a borrowing takes place, the agreement
contains financial covenants that require OneSource to maintain
an adjusted quick ratio of 2.0:1 and to report a net profit of
at least $1 each fiscal quarter. The adjusted quick ratio is
defined as quick assets to current liabilities, minus deferred
revenue. No amounts were drawn under this agreement and no
interest expense has been recorded through December 31,
2002.

F-13



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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

7.     Net Income Per
Share

Below is a summary of the shares used in
computing basic and diluted net income per share for the years
indicated.

|                                                                              |                                                |                         |        |      |  |      |        |       |  |  |        |       | 
|----------------------------------------------------------------------------- | ---------------------------------------------- | ----------------------- | ------ | ---- |  | ---- | ------ | ----- |  |  | ------ | ----- | 
|                                                                              |                                                |                        
|                                                                              |                                                | Year ended December 31,
|                                                                              |                                                |                        
|                                                                              |                                                | 2002                    |        | 2001 |  | 2000
|                                                                              |                                                |                         |        |      |  |     
|                                                                              |                                                |                        
|                                                                              |                                                | (In thousands)         
|Weighted-average shares outstanding used for
    basic net income per share   |                                                |                         | 11,859 |      |  |      | 12,424 |       |  |  | 11,509 |      
|                                                                              | Incremental shares from dilutive stock options |                         |        | 653  |  |      |        | 1,095 |  |  |        | 2,000 | 
|                                                                              |                                                |                         |        |      |  |      |        |       |  |  |        |      
|Weighted-average shares outstanding used for
    diluted net income per share |                                                |                         | 12,512 |      |  |      | 13,519 |       |  |  | 13,509 |      
|                                                                              |                                                |                         |        |      |  |      |        |       |  |  |        |      

For the years ended December 31, 2002, 2001,
and 2000, stock options to purchase 2,317,512, 1,026,931, and
2,909,101 shares of common stock, respectively, were
outstanding, but were not included in the computation of diluted
net income per share because the exercise prices of the options
were greater than the average market price of common stock
during the year; as a result inclusion would have been
antidilutive.

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.



| |               
| | --------------
| | Treasury Stock

In April 2001, OneSource announced a stock
buyback program to repurchase up to 1,000,000 shares of
OneSource common stock over the following twelve months. In
January 2002, OneSource completed the repurchase of its common
stock authorized under this program at an average price of $8.48
per share.

In January 2002, OneSources Board of
Directors announced a second stock buyback program to repurchase
up to an additional $5.0 million of its common stock over
the following twelve months. In November 2002, OneSource
completed its second stock buyback program, having repurchased
749,931 shares of its common stock at an average price of
$6.67 per share.

In October 2002, OneSources Board of
Directors announced a third stock buyback program to repurchase
up to an additional $5.0 million of its common stock over
the following twelve months. As of December 31, 2002, under
this third stock buyback program, OneSource has repurchased
28,819 shares of its common stock for a total cost of
$0.2 million at an average price of $6.64 per share.
OneSource intends to use a portion of its existing cash and cash
equivalents balances to execute additional repurchases under
this third stock buyback program.

Effective August 31, 2002, OneSource began
to reissue treasury stock, using the average cost method, for
stock option exercises associated with OneSources various
stock option plans and the 1999 Employee Stock Purchase Plan, as
amended. As of December 31, 2002, OneSouce had reissued
173,038 shares of its treasury stock having an average cost
of $7.72 per share.

F-14



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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |                
| | ---------------
| | Reserved Shares

At December 31, 2002, OneSource had reserved
3,856,700 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 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

F-15



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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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, the 1999 Plan
and the Director Plan during the years ended December 31,
2000, 2001 and 2002 are summarized as follows:

|                                |           |           |           |                |   |   |      |      | 
|------------------------------- | --------- | --------- | --------- | -------------- | - | - | ---- | ---- | 
|                                |           |           |           | Weighted-     
|                                |           | Number of |           | average       
|                                |           | shares    |           | exercise price
|                                |           |           |           |               
|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 |     
|                                | Granted   |           |           | 1,123,900      |   |   |      | 6.78 | 
|                                | Exercised |           |           | (388,526       | ) |   |      | 1.99 | 
|                                | Forfeited |           |           | (409,551       | ) |   |      | 8.14 | 
|                                |           |           |           |                |   |   |      |     
|Outstanding  December 31, 2002 |           |           | 3,314,693 |                |   |   | 6.69 |     

The following table summarizes information about
stock options outstanding and exercisable at December 31,
2002:

|                        |  |             |           |             |  |               |       |           |  |           |     |  |  |  |           |  |  |   |       | 
|----------------------- |  | ----------- | --------- | ----------- |  | ------------- | ----- | --------- |  | --------- | --- |  |  |  | --------- |  |  | - | ----- | 
|                        |  |             |           |            
|                        |  | 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 $0.12          |  |             | 7,938     |             |  | $             | 0.12  |           |  |           | 1.1 |  |  |  | 7,938     |  |  | $ | 0.12  | 
|$1.36 to $1.36          |  |             | 212,937   |             |  |               | 1.36  |           |  |           | 1.7 |  |  |  | 212,937   |  |  |   | 1.36  | 
|$2.18 to $2.18          |  |             | 414,131   |             |  |               | 2.18  |           |  |           | 1.4 |  |  |  | 414,131   |  |  |   | 2.18  | 
|$5.15 to $7.13          |  |             | 1,170,324 |             |  |               | 6.71  |           |  |           | 9.0 |  |  |  | 151,160   |  |  |   | 6.71  | 
|$7.93 to $10.50         |  |             | 1,486,388 |             |  |               | 8.64  |           |  |           | 7.6 |  |  |  | 626,689   |  |  |   | 8.93  | 
|$12.00 to $12.13        |  |             | 22,975    |             |  |               | 12.04 |           |  |           | 6.3 |  |  |  | 17,455    |  |  |   | 12.04 | 
|                        |  |             |           |             |  |               |       |           |  |           |     |  |  |  |           |  |  |   |       | 
|                        |  |             | 3,314,693 |             |  | $             | 6.69  |           |  |           | 6.9 |  |  |  | 1,430,310 |  |  | $ | 5.61  | 
|                        |  |             |           |             |  |               |       |           |  |           |     |  |  |  |           |  |  |   |       | 

As of December 31, 2001 and 2000, 1,332,479
and 1,932,640 options were exercisable, respectively, under the
1993 Plan and the 1999 Plan. As of December 31, 2002, there
were 579,249 shares of common stock available for grant under
the 1999 Plan and the Director Plan.



| |           
| | ----------
| | Fair Value

Compensation expense has been recognized for
OneSources stock option plans in accordance with APB
Opinion No. 25. Had compensation cost been determined based
on the fair value of the options at the grant

F-16



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##### Table of Contents



ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

date consistent with the provisions of
SFAS No. 123, OneSources net income (loss) and
net income (loss) per share on a pro forma basis would be as
follows:

|                                     |             |                         |   |       |  |      |   |       |  |  |   |       |  
|------------------------------------ | ----------- | ----------------------- | - | ----- |  | ---- | - | ----- |  |  | - | ----- | -
|                                     |             |                        
|                                     |             | Year ended December 31,
|                                     |             |                        
|                                     |             | 2002                    |   | 2001  |  | 2000
|                                     |             |                         |   |       |  |     
|Net income (loss) (in thousands):    |             |                         |   |       |  |      |   |       |  |  |   |      
|                                     | As reported |                         | $ | 4,431 |  |      | $ | 4,656 |  |  | $ | 858   |  
|                                     | Pro forma   |                         |   | 2,133 |  |      |   | 2,974 |  |  |   | (214  | )
|Basic net income (loss) per share:   |             |                         |   |       |  |      |   |       |  |  |   |      
|                                     | As reported |                         |   | 0.37  |  |      |   | 0.37  |  |  |   | 0.07  |  
|                                     | Pro forma   |                         |   | 0.18  |  |      |   | 0.24  |  |  |   | (0.02 | )
|Diluted net income (loss) per share: |             |                         |   |       |  |      |   |       |  |  |   |      
|                                     | As reported |                         |   | 0.35  |  |      |   | 0.34  |  |  |   | 0.06  |  
|                                     | Pro forma   |                         |   | 0.17  |  |      |   | 0.22  |  |  |   | (0.02 | )

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:                 |                                                | 2002                    |       | 2001 |  | 2000
|                             |                                                |                         |       |      |  |     
|Expected option term (years) |                                                |                         | 5.0   |      |  |      | 5.0   |      |  |  | 5.0   |     
|Risk-free interest rate(%)   |                                                |                         | 4.34  |      |  |      | 4.86  |      |  |  | 6.45  |     
|Expected volatility(%)       |                                                |                         | 56.00 |      |  |      | 59.00 |      |  |  | 50.00 |     
|Dividend yield(%)            |                                                |                         |      |      |  |      |      |      |  |  |      |     
|Fair value:                  |                                                |                         |       |      |  |      |       |      |  |  |       |     
|                             | Weighted-average fair value of options granted |                         | $     | 3.57 |  |      | $     | 4.36 |  |  | $     | 4.32 | 

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:               |                                                                            | 2002                    |       | 2001 |  | 2000
|                           |                                                                            |                         |       |      |  |     
|Expected term (years)      |                                                                            |                         | 0.49  |      |  |      | 0.54  |      |  |  | 0.57  |     
|Risk-free interest rate(%) |                                                                            |                         | 2.50  |      |  |      | 5.05  |      |  |  | 5.41  |     
|Expected volatility(%)     |                                                                            |                         | 56.00 |      |  |      | 59.00 |      |  |  | 50.00 |     
|Dividend yield(%)          |                                                                            |                         |      |      |  |      |      |      |  |  |      |     
|Fair value:                |                                                                            |                         |       |      |  |      |       |      |  |  |       |     
|                           | Weighted-average fair value of award purchased
    under the Purchase Plan |                         | $     | 2.34 |  |      | $     | 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 was 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

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ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

value of the common stock at the date of grant.
Unearned compensation of $438,000, less $92,000 subsequently
forfeited by a terminated employee, was recorded in accordance
with APB No. 25 and was amortized over the related
vesting period of four years. Related compensation expense of
$77,000, $97,000 and $97,000 was recorded during the years ended
December 31, 2002, 2001, and 2000, respectively.

Options issued during 2002, 2001 and 2000 were
granted with exercise prices equal to 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 $660,000
in 2001 associated with the workforce reduction and
consolidation. All amounts were paid during 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,
|                                     |          |                        
|                                     |          | 2002                    |       | 2001  |  | 2000
|                                     |          |                         |       |       |  |     
|                                     |          |                        
|                                     |          | (In thousands)         
|Income (loss) before income taxes:   |          |                         |       |       |  |      |       |       |  |   |     |       
|                                     | Domestic |                         | $     | 4,544 |  |      | $     | 4,682 |  |   | $   | 2,788  |  
|                                     | Foreign  |                         |       | 2,489 |  |      |       | 1,856 |  |   |     | (1,864 | )
|                                     |          |                         |       |       |  |      |       |       |  |   |     |       
|                                     |          | $                       | 7,033 |       |  | $    | 6,538 |       |  | $ | 924 |       
|                                     |          |                         |       |       |  |      |       |       |  |   |     |       
|Current provision for income taxes:  |          |                         |       |       |  |      |       |       |  |   |     |       
|                                     | Federal  |                         | $     | 846   |  |      | $     | 401   |  |   | $   |       |  
|                                     | State    |                         |       | 365   |  |      |       | 427   |  |   |     | 66     |  
|                                     | Foreign  |                         |       | 774   |  |      |       | 130   |  |   |     |       |  
|                                     |          |                         |       |       |  |      |       |       |  |   |     |       
|                                     |          |                         | 1,985 |       |  |      | 958   |       |  |   | 66  |       
|                                     |          |                         |       |       |  |      |       |       |  |   |     |       
|Deferred provision for income taxes: |          |                         |       |       |  |      |       |       |  |   |     |       
|                                     | Federal  |                         |       | 512   |  |      |       | 563   |  |   |     |       |  
|                                     | State    |                         |       | 105   |  |      |       | 116   |  |   |     |       |  
|                                     | Foreign  |                         |       |      |  |      |       | 245   |  |   |     |       |  
|                                     |          |                         |       |       |  |      |       |       |  |   |     |       
|                                     |          |                         | 617   |       |  |      | 924   |       |  |   |    |       
|                                     |          |                         |       |       |  |      |       |       |  |   |     |       
|Total provision for income taxes     |          | $                       | 2,602 |       |  | $    | 1,882 |       |  | $ | 66  |       
|                                     |          |                         |       |       |  |      |       |       |  |   |     |       

OneSource had no deferred provision for income
taxes in the year ended December 31, 2000 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,
|                                                        |  |                        
|                                                        |  | 2002                    |       | 2001 |  | 2000
|                                                        |  |                         |       |      |  |     
|                                                        |  |                        
|                                                        |  | (In thousands)         
|Income tax expense at US federal statutory tax
    rate |  | $                       | 2,391 |      |  | $    | 2,223  |   |  | $ | 314  |  
|State income taxes, net of federal tax effect           |  |                         | 346   |      |  |      | 398    |   |  |   | 44   |  
|Permanent items                                         |  |                         | 55    |      |  |      | 362    |   |  |   | 389  |  
|Other                                                   |  |                         | (190  | )    |  |      | 127    |   |  |   | 12   |  
|Change in deferred tax asset valuation allowance        |  |                         |      |      |  |      | (1,228 | ) |  |   | (693 | )
|                                                        |  |                         |       |      |  |      |        |   |  |   |      |  
|Provision for income taxes                              |  | $                       | 2,602 |      |  | $    | 1,882  |   |  | $ | 66   |  
|                                                        |  |                         |       |      |  |      |        |   |  |   |      |  

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

|                             |                                        |                                |      |        |       |   |      |        |       | 
|---------------------------- | -------------------------------------- | ------------------------------ | ---- | ------ | ----- | - | ---- | ------ | ----- | 
|                             |                                        |                               
|                             |                                        | December 31,                  
|                             |                                        |                               
|                             |                                        | 2002                           |      | 2001  
|                             |                                        |                                |      |       
|                             |                                        |                               
|                             |                                        | (In thousands)                
|Deferred tax assets:         |                                        |                                |      |        |       |   |      |       
|                             | Net operating loss carryforwards       |                                | $    | 2,727  |       |   | $    | 4,073  |      
|                             | Depreciation                           |                                |      | 54     |       |   |      | 727    |      
|                             | Accrued expenses                       |                                |      | 347    |       |   |      | 325    |      
|                             | Other                                  |                                |      | 317    |       |   |      | 145    |      
|                             |                                        |                                |      |        |       |   |      |       
|                             |                                        | Gross deferred tax asset       |      |        | 3,445 |   |      |        | 5,270 | 
|                             | Less: valuation allowance              |                                |      | (1,635 | )     |   |      | (3,530 | )    
|                             |                                        |                                |      |        |       |   |      |       
|                             |                                        | Total deferred tax assets      |      |        | 1,810 |   |      |        | 1,740 | 
|                             |                                        |                                |      |        |       |   |      |       
|Deferred tax liabilities:    |                                        |                                |      |        |       |   |      |       
|                             | Prepaid expenses                       |                                |      | 674    |       |   |      | 550    |      
|                             | Capitalized software development costs |                                |      | 882    |       |   |      | 377    |      
|                             | Tax operating leases                   |                                |      |       |       |   |      | 384    |      
|                             | Other intangible assets                |                                |      | 499    |       |   |      | 674    |      
|                             |                                        |                                |      |        |       |   |      |       
|                             |                                        | Total deferred tax liabilities |      |        | 2,055 |   |      |        | 1,985 | 
|                             |                                        |                                |      |        |       |   |      |       
|Net deferred tax liabilities |                                        | $                              | (245 | )      |       | $ | (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, 2002, OneSource has
combined federal and state net operating loss carryforwards of
approximately $6.6 million. The federal net operating loss
carryforwards begin to expire in 2019 and the state net
operating loss carryforwards begin to expire in 2004. 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.

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ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The net operating loss carryforwards relates to
deductions for the exercise of non-qualified stock options and
will be credited to additional paid-in capital upon realization.



|    |                      
|--- | ---------------------
|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 during the year ended
December 31, 2000.



|    |                       
|--- | ----------------------
|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 $354,000, $294,000 and $139,000 for the years ended
December 31, 2002, 2001 and 2000, respectively.



|    |                           
|--- | --------------------------
|14. | Related Party Transactions

During 2002, OneSource had two related party
transactions for subscriptions to OneSource products. At
December 31, 2002, OneSource had trade accounts receivable
of $650,000 due from one stockholder. OneSource recognized
revenues of $732,000, $766,000, and $563,000 in the years ended
December 31, 2002, 2001 and 2000, respectively, from two
stockholders. As of November 1, 2002, these two
stockholders no longer held more than 5% of OneSource common
stock.

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 for the
years ended December 31, 2002, 2001, and 2000. Future
minimum lease commitments under all noncancellable operating
leases at December 31, 2002 are as follows:

|                             |  |                |       | 
|---------------------------- |  | -------------- | ----- | 
|                             |  | Operating     
|                             |  | Leases        
|                             |  |               
|                             |  | (In thousands)
|2003                         |  | $              | 1,140 | 
|2004                         |  |                | 651   | 
|2005                         |  |                | 239   | 
|2006                         |  |                | 156   | 
|2007                         |  |                | 116   | 
|                             |  |                |       | 
|Total minimum lease payments |  | $              | 2,302 | 
|                             |  |                |       | 

F-20



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ONESOURCE INFORMATION SERVICES, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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 years ended December 31,
2002, 2001 and 2000 was $11.9 million, $11.8 million
and $11.5 million, respectively. Future minimum royalty
payment obligations at December 31, 2002 are as follows:

|                               |  |                |        | 
|------------------------------ |  | -------------- | ------ | 
|                               |  | Royalty       
|                               |  | Minimums      
|                               |  |               
|                               |  | (In thousands)
|2003                           |  | $              | 7,252  | 
|2004                           |  |                | 2,953  | 
|                               |  |                |        | 
|Total minimum royalty payments |  | $              | 10,205 | 
|                               |  |                |        | 

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,
|               |  |                        
|               |  | 2002                    |        | 2001 |  | 2000
|               |  |                         |        |      |  |     
|United States  |  | $                       | 42,034 |      |  | $    | 44,086 |  |  | $ | 41,080 | 
|United Kingdom |  |                         | 15,716 |      |  |      | 14,931 |  |  |   | 10,809 | 
|               |  |                         |        |      |  |      |        |  |  |   |        | 
|               |  | $                       | 57,750 |      |  | $    | 59,017 |  |  | $ | 51,889 | 
|               |  |                         |        |      |  |      |        |  |  |   |        | 

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

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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 January 27, 2003
listed in the index appearing under Item 16(a)(1) on page
38 also included an audit of the financial statement schedule
listed in Item 16(a)(2) on page 38 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

January 27, 2003


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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 |  | Period    
|                             |                                                           |                                        |  |            |       |            |  |           
|Year ended December 31, 2000 |                                                           |                                        |  |            |       |            |  |            |       |   |  |   |       |     |  |  
|                             | Reserves and allowances deducted from asset
    accounts: |                                        |  |            |       |            |  |            |       |   |  |   |       |     |  |   |      
|                             |                                                           | Allowance for doubtful accounts        |  | $          | 348   |            |  | $          | 339   |   |  | $ | 15    | (1) |  | $ | 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   | (1) |  | $ | 770   | 
|                             |                                                           | Deferred tax asset valuation allowance |  | $          | 5,023 |            |  | $          |      |   |  | $ | 1,493 |     |  | $ | 3,530 | 
|Year ended December 31, 2002 |                                                           |                                        |  |            |       |            |  |            |       |   |  |   |       |     |  |  
|                             | Reserves and allowances deducted from asset
    accounts: |                                        |  |            |       |            |  |            |       |   |  |   |       |     |  |   |      
|                             |                                                           | Allowance for doubtful accounts        |  | $          | 770   |            |  | $          | (379  | ) |  | $ | 92    | (1) |  | $ | 299   | 
|                             |                                                           | Deferred tax asset valuation allowance |  | $          | 3,530 |            |  | $          |      |   |  | $ | 1,895 |     |  | $ | 1,635 | 






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

S-2