COGNIZANT CORPORATION

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                          1996 Report to Shareholders





                                COGNIZANT [LOGO]







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                              COGNIZANT CORPORATION

                           1996 REPORT TO SHAREHOLDERS

                                TABLE OF CONTENTS

Financial Review ...............................................    1-6
Statement of Management's Responsibility for
 Financial Statements ..........................................      7
Report of Independent Accountants ..............................      7
Consolidated Financial Statements ..............................   8-11
Notes to Consolidated Financial Statements .....................  12-23
Five-Year Selected Financial Data ..............................     24

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COGNIZANT CORPORATION

FINANCIAL REVIEW
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         On November 1, 1996, The Dun and Bradstreet Corporation ("D&B")
distributed to its shareholders all of the outstanding shares of common stock of
Cognizant Corporation (the "Company"), then a wholly-owned subsidiary of D&B
(the "Distribution"). In the Distribution, holders of D&B common stock received
one share of the Company's common stock for every share of D&B common stock
held.

YEAR-ENDED DECEMBER 31, 1996 COMPARED WITH
 YEAR-ENDED DECEMBER 31, 1995

           Revenue in 1996 increased 12.2% to $1,730,596 from $1,542,340 in
1995. Revenue growth was held down principally by the one-time impact in 1995 of
conforming fiscal quarters between the Company and Gartner Group ("the Gartner
Group fiscal quarter change") and by the impact of discontinued business units
not in the portfolio in 1996. Excluding these items, revenue growth was 14.8%.
The increase reflected continued high growth at Gartner Group, principally from
the introduction of new products and delivery options and double digit revenue
performance at IMS and Nielsen Media Research, partially offset by declining
revenues at Pilot Software. The growth at Nielsen Media Research was driven by
the addition of new cable and broadcast customers, new products and services and
continued service expansion to existing customers. The impact of a stronger U.S.
dollar in 1996 decreased revenue growth for the Company by approximately 1%.

         Operating costs and selling and administrative expenses in 1996 were
$1,253,567 compared with $1,242,331 in 1995, an increase of 0.9%. Operating
costs and selling and administrative expenses in 1995 include a non-recurring
charge of $90,070 ($49,268 after-tax) for costs principally associated with
asset impairments, software write-offs and contractual obligations that have no
future economic benefit, an incremental provision for postemployment benefit
expense of $32,500 ($17,778 after tax), the Gartner Group fiscal quarter change
and the impact of discontinued business units not in the portfolio in 1996.
Operating costs and selling and administrative expenses in 1996 include a
one-time acquisition-related charge of $33,233 ($32,778 after-tax) for
in-process research and development costs associated with Gartner Group's
acquisition of J3 Learning Corporation ("J3"). Excluding the above-mentioned
1995 and 1996 items, operating costs and selling and administrative expenses
increased 13.4% to $1,217,056 in 1996 from $1,072,980 in 1995, reflecting the
Company's increased spending in new revenue growth initiatives which contributed
to revenue growth of 14.8% in 1996. The impact of a stronger U.S. dollar in 1996
decreased operating costs and selling and administrative expense growth by
approximately 1%.

         Operating income in 1996 increased 121.9% to $343,168 from $154,677 in
1995. The increase reflects the impact of the 1995 and 1996 items discussed
above as well as 1995 restructuring expense of $12,800 ($7,002 after-tax).
Excluding these 1995 and 1996 items operating income increased 25.5% to $379,679
in 1996 from $302,438 in 1995. Operating income growth outpaced revenue growth
primarily due to Gartner Group's ability to take advantage of economies of scale
and IMS's ability to leverage its resources. The impact of a stronger U.S.
dollar in 1996 decreased operating income growth by approximately 2%.

         Operating margin in 1996 was 19.8% compared with 10.0% in 1995. The
increase reflects the impact of the 1995 and 1996 items described above.
Excluding these items in both years operating margin was 21.9% in 1996 compared
with 20.1% in 1995.

         Non-operating income-net in 1996 was $5,853 compared with non-operating
income-net of $7,880 in 1995, a decrease of 25.7%. The decrease was due
principally to lower disposition gains in 1996, partially offset by lower
minority interest expense related to Gartner Group due to the 1996
acquisition-related charge, and the impact in 1996 of a foreign exchange hedge
gain. Excluding the disposition gains in 1995 and 1996 and adding back the
minority interest expense associated with the 1996 acquisition-related charge,
non-operating expense-net was $8,116 in 1996, as compared with $5,193 in 1995.

         The Company's consolidated 1996 effective tax rate was 44.0%, compared
with 45.3% in 1995. The tax rates were computed on a separate-company basis. The
Company has initiated global tax planning strategies to lower its effective tax
rate.

         Net income in 1996 was $195,451 compared with $88,881 in 1995, an
increase of 119.9%. Results for 1995 and 1996 include the items described above.
Excluding these items net income increased 28.0% to $208,075 in 1996, from
$162,593 in 1995.

         RESULTS BY BUSINESS SEGMENT

         The Marketing Information Services segment consists of IMS, Nielsen
Media Research, Pilot Software, Erisco, Cognizant Technology Solutions, and
Cognizant Enterprises. Marketing Information Services had an 8.4% increase in
1996 revenue to $1,306,214 from $1,204,701 in 1995. IMS had 1996 revenue of
$904,444, up 10.5% from $818,537 in 1995, and up 11.7% excluding the impact of a
stronger U.S. dollar. Excluding the impact of discontinued business units that
are no longer in the portfolio in 1996, revenue growth for the segment was
10.1%, reflecting Nielsen Media Research's addition of new cable and broadcast
customers, metered market and local Hispanic service expansion and continued

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service expansion to existing customers; and strong performance of core business
services and new product introductions at IMS. Growth in 1996 was adversely
impacted by declining revenues at Pilot Software. Excluding the impact of a
stronger U.S. dollar, revenue growth for the segment was 11.1%.

         1996 operating income for the segment was $319,385 compared with
$158,037 in 1995, an increase of 102.1%. The increase was primarily due to the
absence in 1996 of: $72,870 of the 1995 non-recurring charge, $24,300 of the
1995 incremental provision for postemployment benefits expense, and 1995
restructuring expense of $12,800. Excluding these items and the impact of
discontinued business units that are no longer in the portfolio, operating
income for the segment grew 11.5% to $319,349 in 1996, from $286,476 in 1995.
IMS, the largest business within this segment, delivered 18.0% operating income
growth, which was partially offset by a loss at Pilot Software. Excluding the
impact of a stronger U.S. dollar, operating income growth for the segment was
13.7%.

         The Information Technology Services segment consists of the Company's
majority-owned subsidiary, Gartner Group. Information Technology Services had
1996 revenue of $424,382, up 25.7% from $337,639 in 1995. Revenue growth was
held down by the impact of the Gartner Group fiscal quarter change. Excluding
this impact, revenue growth was 32.0%. This growth principally reflected strong
gains at Gartner Group from symposium events, consulting and technology-based
training businesses.

         Operating income for the segment increased 17.5% to $60,114 in 1996
from $51,180 in 1995. This growth was held down by the 1996 acquisition-related
charge. In addition, 1995 results include $8,200 of the incremental provision
for postemployment benefits expense and the impact of the Gartner Group fiscal
quarter change. Excluding these items, operating income for the segment grew
67.2% to $93,347 in 1996 from $55,818 in 1995. The growth in operating income
was primarily due to Gartner Group's revenue growth and its ability to take
advantage of economies of scale.

         RESULTS BY GEOGRAPHIC AREA

           Revenue in the United States increased by 13.9% to $950,526 in 1996
from $834,786 in 1995. The increase reflected Gartner Group's introduction of
new products and delivery options, Nielsen Media Research's addition of new
customers and service expansions, and new product introductions by IMS,
partially offset by declining revenues at Pilot Software, the impact of the
Gartner Group fiscal quarter change and the absence of revenue from discontinued
business units no longer in the portfolio. Revenue increased in Europe by 9.9%
to $505,969 in 1996 from $460,320 in 1995, principally reflecting continued
growth at IMS and Gartner Group's increased subscription services revenue and
expansion into new global markets. All other non-U.S. revenues increased 10.9%
to $274,101 in 1996 from $247,234 in 1995. Excluding the 1996 and 1995 items
discussed previously and the impact of a stronger U.S. dollar, revenue growth in
Europe and other non-U.S. was 12.0% and 16.2%, respectively.

         Operating income in the U.S. was $131,402 in 1996 compared with $45,149
in 1995, an increase of 191.0%. The increase was primarily attributable to the
absence in 1996 of the 1995 non-recurring charge, the 1995 incremental provision
for postemployment benefit expense and 1995 restructuring expense, offset, in
part, by the impact of the 1995 Gartner Group fiscal quarter change, the 1996
acquisition-related charge and the impact of discontinued business units not in
the portfolio in 1996. Operating income in Europe was $120,119 in 1996 compared
with $52,694 in 1995, an increase of 128.0%. The increase in operating income
was primarily due to the absence in 1996 of the 1995 non-recurring charge and
the 1995 incremental provision for postemployment benefit expense. Operating
income in other non-U.S. countries was $91,647 in 1996 compared with $56,834 in
1995, an increase of 61.3%. Excluding the 1996 and 1995 items discussed
previously and the impact of a stronger U.S. dollar, operating income growth for
Europe and other non-U.S. was 24.4% and 59.4%, respectively.

YEAR-ENDED DECEMBER 31, 1995 COMPARED WITH
 YEAR-ENDED DECEMBER 31, 1994

         Revenue in 1995 increased 22.7% to $1,542,340 from $1,257,415 in 1994.
Revenue growth was favorably affected principally by the impact in 1995 of the
Gartner Group fiscal quarter change partially offset by the impact of
discontinued business units during 1995. Excluding these items, revenue growth
was 20.4%. This increase principally reflected strong revenue growth at Gartner
Group and strong revenue performances at IMS and Nielsen Media Research. The
impact of a weaker U.S. dollar in 1995 increased revenue growth by approximately
4%.

         Operating costs and selling and administrative expenses in 1995 were
$1,242,331 compared with $911,074 in 1994, an increase of 36.4%. This increase
was primarily due to the 1995 non-recurring charge, the 1995 incremental
provision for postemployment benefit expense and the impact of the Gartner Group
fiscal quarter change discussed previously. This was partially offset by the
impact of discontinued business units during 1995. Excluding these 1995 items
and curtailment gains and other one-time items recorded in 1994, 1995 operating
costs and selling and administrative expenses increased 16.3% to $1,072,980 in
1995 from $922,576 in 1994 reflecting the Company's increased spending in new
revenue growth initiatives which contributed to revenue growth of 20.4% in 1995.
This increased spending was

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partially offset by productivity gains at IMS and Gartner Group. The impact of a
weaker U.S. dollar in 1995 increased operating costs and selling and
administrative expense growth by 3%.

         The following discusses the fourth quarter 1995 non-recurring charge:

         In the fourth quarter of 1995, the Company recorded within operating
costs a charge of $90,070. This charge primarily reflected an impairment loss in
connection with the adoption of the provisions of SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
($40,570), the write-off of certain computer software ($20,300), a provision for
postemployment benefits ($7,400) under D&B's severance plan and an accrual for
contractual obligations that have no future economic benefits ($21,800). No
payments relating to the accrued contractual obligations were made in 1995.

         SFAS No. 121 requires that long-lived assets and certain intangibles be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. In connection with
this review, the Company recorded an impairment loss of $40,570 reflecting the
revaluation of certain fixed assets, administrative and production systems and
other intangibles that were replaced or no longer used. In addition, the Company
recognized a charge of $20,300 principally related to the write-off of certain
computer software product lines at Pilot Software.

         The provision for postemployment benefits of $7,400, represented the
cost of workforce reductions. The accrual for contractual obligations that have
no future economic benefits of $21,800 related to the acquisition of certain
information and other services that were no longer used by the Company.

         The 1995 non-recurring charge of $90,070 ($49,268 after-tax) evolved
from D&B's annual budget and strategic planning process in the fall of 1995,
which indicated, based on preliminary results, that D&B's consolidated long-term
profitability objectives would not be achieved. Accordingly, a more
comprehensive review was undertaken to assess D&B's underlying cost structure,
products and services and assets used in the business. Based upon such analysis,
management, having the authority to approve such business decisions, committed
in December 1995 to a plan to discontinue certain product lines and dispose of
certain other assets, resulting in the charge. These decisions were not reversed
or modified as a result of D&B's reorganization plan relating to the
Distribution, which was reviewed and, subject to certain conditions, approved by
the Board of Directors of D&B on January 9, 1996.

         Additionally, during 1995 the Company recorded a $12,800 restructuring
provision primarily to write-off software for product lines that were
discontinued at Sales Technologies, a division of IMS. (See Note 4 to the
Consolidated Financial Statements.)

         1995 operating income was $154,677 compared with $226,635 in 1994, a
decrease of 31.8%. The decrease reflects the impact of the 1995 items discussed
above as well as an increase in restructuring expense in 1995. These items are
partially offset by the impact of the Gartner Group fiscal quarter change.
Excluding the 1995 and 1994 items described above and restructuring expense in
both years operating income increased 38.3% to $302,438 from $218,625. The
impact of a weaker U.S. dollar in 1995 increased operating income growth by
approximately 6%.

         Operating margin in 1995 was 10.0% compared with 18.0% in 1994. The
decline reflected the impact of the 1995 and 1994 items discussed above.
Excluding these items operating margin was 20.1% for 1995 compared with 17.4%
for 1994.

         Non-operating income-net was $7,880 in 1995 compared with $18,853 in
1994, a decrease of 58.2%. The decrease was due principally to higher minority
interest expense related to Gartner Group, and lower disposition gains, offset
in part by increased interest income. Excluding principally the impact of
disposition gains in both years, non-operating (expense)/income--net was
($5,193) in 1995, as compared with $1,075 in 1994.

         Net income in 1995 was $88,881 compared with $146,405 in 1994, a
decrease of 39.3%. Results for 1995 and 1994 include the items described above,
and a higher effective tax rate of 45.3% in 1995, as compared with 40.4% in
1994, primarily due to the impact of repatriation of non-U.S. subsidiary
earnings without offsetting foreign tax credits. Excluding these 1995 and 1994
items, 1995 net income increased 24.2% to $162,593, from $130,941 in 1994.

         RESULTS BY BUSINESS SEGMENT

           Marketing Information Services had 1995 revenue of $1,204,701, up
18.2% from $1,019,160 in 1994. IMS had 1995 revenue of $818,537, up 18.4% from
$691,060 in 1994, and up 12.9% excluding the impact of a weaker U.S. dollar.
Excluding the impact of business units that were discontinued during 1995
revenue growth for the segment was 16.5%. The increase reflected Nielsen Media
Research's addition of new customers (due in part to Arbitron's exit from the
marketplace), new products and services and strong growth in Canada, and new
product introductions at IMS. Excluding the impact of a weaker U.S. dollar,
revenue growth for the segment was 12.5%.

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         1995 operating income for the segment was $158,037 compared with
$228,864 in 1994, a decrease of 30.9%. The decline was primarily due to the 1995
non-recurring charge, the 1995 incremental provision for postemployment benefit
expense, an increase in restructuring expense in 1995 and the impact of business
units that were discontinued during 1995. Excluding these items, restructuring
expense in both years, and the curtailment gains and other one-time items in
1994, operating income for the segment increased 32.8% to $286,476 in 1995
compared with $215,743 in 1994. Excluding the impact of a weaker U.S. dollar
operating income growth for the segment was 26.5%. This growth was favorably
impacted by productivity gains at IMS.

         Information Technology Services had 1995 revenue of $337,639, up 41.7%
from $238,255 in 1994. Revenue growth was favorably impacted by the effect of
the Gartner Group fiscal quarter change partially offset by the impact of a sale
of a division in 1994. Excluding these items 1995 revenue growth was 36.9%. The
increase principally reflected an increase in subscription services revenue at
Gartner Group.

         Operating income for the segment increased 49.7% to $51,180 in 1995
from $34,185 in 1994. The increase was primarily due to Gartner Group's revenue
growth and its ability to take advantage of economies of scale and the effect of
the Gartner Group fiscal quarter change. These items are partially offset by the
1995 incremental provision for postemployment benefit expense. Excluding the
impact of the postemployment benefit provision, the Gartner Group fiscal quarter
change and the sale of a division in 1994, operating income for the segment grew
80.1% to $55,818 in 1995 from $30,989 in 1994.

         RESULTS BY GEOGRAPHIC AREA

           Revenue in the United States increased by 27.1% to $834,786 in 1995
from $656,701 in 1994, reflecting Gartner Group's increased services revenue
(including the impact of the Gartner Group fiscal quarter change), Nielsen Media
Research's addition of new customers (due in part to Arbitron's exit from the
marketplace) and new products and services, and new product introductions by
IMS. This was partially offset by the impact of discontinued business units in
1995 and 1994. Revenue increased in Europe by 14.1% to $460,320 in 1995 from
$403,423 in 1994, principally reflecting continued growth at IMS and Gartner
Group's increased subscription services revenue and expansion into new global
markets. All other non-U.S. revenues increased 25.3% to $247,234 in 1995 from
$197,291 in 1994. Excluding the 1995 and 1994 items discussed previously and the
impact of a weaker U.S. dollar, revenue growth in Europe and other non-U.S. was
12.2% and 18.3%, respectively.

           Operating income in the U.S. was $45,149 in 1995 compared with
$129,830 in 1994, a decrease of 65.2%. The decline was primarily attributable to
the 1995 non-recurring charge, the 1995 incremental provision for postemployment
benefit expense, higher 1995 restructuring expenses, the impact of discontinued
business units in 1995 and 1994, and curtailment gains and other one-time items
in 1994. Partially offsetting this was the impact of the Gartner Group fiscal
quarter change. Operating income in Europe was $52,694 in 1995 compared with
$59,338 in 1994, a decrease of 11.2%. The decline was primarily due to the 1995
non-recurring charge and the 1995 incremental provision for postemployment
benefit expense. Operating income in other non-U.S. countries grew 51.7% to
$56,834 in 1995 from $37,467 in 1994. Excluding the 1995 and 1994 items
discussed previously and the impact of a weaker U.S. dollar, operating income 
growth for Europe was 40.2%, principally reflecting productivity gains at IMS,
and 47.5% for other non-U.S. countries.

CHANGES IN FINANCIAL POSITION AT DECEMBER 31, 1996
 COMPARED WITH DECEMBER 31, 1995

         Cash and Cash Equivalents increased to $428,520 at December 31, 1996
from $157,105 at December 31, 1995 primarily due to cash transferred from D&B in
connection with the Distribution. Sources of cash in 1996 included strong
operating cash flow from IMS, Nielsen Media Research and Gartner Group.

         Marketable Securities and Other Investments increased to $117,706 at
December 31, 1996 from $33,201 at December 31, 1995 principally due to
additional equity investments and unrealized gains on investments.

         Other Liabilities and Minority Interests increased to $166,785 at
December 31, 1996 from $53,267 at December 31, 1995 principally due to long-term
liabilities assumed in connection with the Distribution related to prior
business transactions, and an increase in Gartner Group minority interest
liability.

ADOPTION OF STATEMENTS OF FINANCIAL ACCOUNTING
 STANDARDS

         In 1995, the Company recorded a pre-tax charge of $90,070 that included
an impairment loss of $40,570 related to long-lived assets for which management,
having the authority to approve such business decisions, committed to a plan to
discontinue certain product lines and dispose of certain real property.

         SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of" requires that long-lived assets and
certain intangibles be reviewed for impairment whenever events or changes in

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circumstances indicate that the carrying amount of an asset may not be
recoverable. In general, this statement requires recognition of an impairment
loss when the sum of undiscounted expected future cash flows is less than the
carrying amount of such assets. The measurement for such impairment loss is then
based on the fair value of the asset. While SFAS No. 121 affected the
measurement of the impairment charge noted above, it had no effect on the timing
of recognition of the impairment.

         The 1995 charge principally reflected an impairment loss of $40,570
reflecting the revaluation of certain fixed assets, administrative and
production systems and other intangibles that were replaced or no longer used.
In addition, the Company recorded a charge of $20,300 principally related to the
write-off of certain computer software product lines at Pilot Software. (See
Note 3 to the Consolidated Financial Statements.)

         In October 1995, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 123 "Accounting for Stock-Based Compensation", which requires
that companies with stock-based compensation plans either recognize compensation
expense based on the fair value of options granted or continue to apply the
existing accounting rules and disclose pro forma net income and earnings per
share assuming the fair value method had been applied. The Company has chosen to
continue applying Accounting Principles Board Opinion No. 25 and related
interpretations in accounting for its plans. Accordingly, no compensation cost
has been recognized for the fixed stock option plans. Had compensation cost for
the Company's stock-based compensation plans been determined based on the fair
value at the grant dates for awards under those plans, consistent with the
method of SFAS No. 123, the Company's net income and earnings per share would
have been reduced to the pro forma amounts as disclosed in Note 9 to the
Consolidated Financial Statements.

RESTRUCTURING

         In 1995, the Company recorded a $12,800 restructuring provision
primarily to write off software for product lines that were discontinued at
Sales Technologies, a division of IMS.

         In the second quarter of 1994, the Company recorded a provision of
$7,957 to restructure certain operations and businesses, and to reduce costs and
increase operating efficiencies. These restructuring actions included office
consolidations, the closedown of Sales Technologies' European operations, as
well as additional steps to complete certain actions initiated in 1993.

NON-U.S. OPERATING AND MONETARY ASSETS

         The Company operates globally. Approximately 45% of the Company's
revenues and 62% of operating income in 1996 were derived from non-U.S.
operations, including approximately 29% of revenues and 35% of operating income
from European operations. As a result, fluctuations in the value of foreign
currencies relative to the U.S. dollar may increase the volatility of U.S.
dollar operating results. In 1996, foreign currency translation decreased U.S.
dollar revenue growth and operating income growth by approximately 1% and 2%,
respectively. In 1995, foreign currency translation increased U.S. dollar
revenue growth and operating income growth by approximately 4% and 6%,
respectively.

         Non-U.S. monetary assets are maintained in currencies other than the
U.S. dollar, principally in Switzerland, Germany and Japan. Changes in the value
of these currencies relative to the U.S. dollar are charged or credited to
shareholders' equity. The effect of exchange rate changes during 1996 decreased
the U.S. dollar amount of cash and cash equivalents by $3,074.

LIQUIDITY AND CAPITAL RESOURCES

         At December 31, 1996, cash, cash equivalents and current marketable
securities totaled $450,796 (including $145,973 of Gartner Group cash and
marketable securities). At December 31, 1995, cash, cash equivalents and current
marketable securities totaled $187,223 (including $81,392 of Gartner Group cash
and marketable securities). The increase in cash of $263,573 was primarily due
to cash transferred from D&B in connection with the Distribution. The increase
in cash was held down by payments for restructuring, non-recurring charges and
postemployment benefits of $11,515, $13,125 and $11,045, respectively.

         Net cash provided by operating activities was $352,023, $288,539 and
$209,407 in 1996, 1995 and 1994, respectively. The increase of $63,484 in net
cash provided by operating activities in 1996 primarily reflected improved
collections of accounts receivable and lower postemployment benefit payments,
partially offset by lower other working capital items ($75,459), lower deferred
revenue ($30,512), higher income tax payments ($21,416) and payments related to
the 1995 non-recurring charge of ($13,125). The increase of $79,132 in net cash
provided by operating activities in 1995 primarily reflected higher other
working capital items ($34,273) and lower restructuring payments ($8,933),
partially offset by a higher level of accounts receivables ($10,239).

         Net cash used in investing activities totaled $158,065 for 1996,
compared with $148,169 and $206,127 in 1995 and 1994, respectively. The increase
in cash usage in 1996 of

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$9,896 primarily reflected the purchase of Gartner Group stock, higher payments
for acquisitions and equity investments, offset in part by higher net proceeds
for marketable securities and lower additions to computer software. The decrease
in cash usage in 1995 of $57,958 primarily reflected lower payments for
acquisitions and reduced capital expenditures, offset in part by net purchases
of marketable securities.

         Net cash provided by/(used in) financing activities totaled $80,531 for
1996, compared with ($116,095) and ($106,060) in 1995 and 1994, respectively.
The increase in 1996 cash provided by financing activities principally reflected
a net amount transferred from D&B in connection with the Distribution, compared
with net transfers to D&B in 1995 and long-term liabilities assumed with the
Distribution related to prior business transactions, offset in part by the
payment of short-term debt assumed with the Distribution. The increase in cash
usage in 1995 of $10,035 primarily reflected short and long-term debt payments,
included in Other financing activities.

         The Company will continue to invest in information systems, software
and other technologies. These systems and technologies are subject to
refinements and updating including compliance with "Year 2000". The Year 2000
costs will be expensed as incurred.

         On February 18, 1997 the Company announced that its Board of Directors
had authorized a systematic stock repurchase program to buy up to 8.5 million
shares of the Company's outstanding common stock over a two-year period. Stock
repurchases will be held in Treasury and reissued upon exercise of employee
stock options.

         On March 12, 1997 Gartner Group announced that its Board of Directors
had authorized the repurchase of up to 1.8 million shares of its outstanding
Class A common stock. Gartner Group's stock repurchase program is intended to
offset the dilutive effect of its stock-based employee compensation plan.

         The Company's existing balances of cash, cash equivalents and
marketable securities, and cash generated from operations and debt capacity are
expected to be sufficient to meet the Company's long-term and short-term cash
requirements including dividends, acquisitions and the stock repurchase
programs.

FACTORS THAT MAY AFFECT FUTURE RESULTS

         This report includes statements which may constitute forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Although the Company believes the expectations
contained in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. This information may
involve risk and uncertainties that could cause actual results to differ
materially from the forward-looking statements.

DIVIDENDS

         The payment and level of cash dividends by the Company are subject to
the discretion of the Board of Directors of the Company. Although the Company
has declared and anticipates that it will declare quarterly dividends in the
range of 5% to 8% of net earnings, dividend decisions will be based on, and
affected by, a number of factors, including the operating results and financial
requirements of the Company.

COMMON STOCK INFORMATION

         The Company's common stock (symbol CZT) is listed on the New York Stock
Exchange. The number of shareholders of record and shares issued and outstanding
on December 31, 1996 were 12,815 and 170,277,119, respectively. The high and low
price per share during the period the Company's stock traded "regular way"
during 1996 were $36 7/8 and $31 3/8, respectively. Approximately 70% of
shares were held by institutions.

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STATEMENT OF MANAGEMENT'S
RESPONSIBILITY FOR FINANCIAL                                
STATEMENTS                                                  
--------------------------------------------------------------------------------
To the Shareholders of Cognizant Corporation:

         Management is responsible for the preparation of the consolidated
financial statements and related information that are presented in this report.
The consolidated financial statements, which include amounts based on
management's estimates and judgments, have been prepared in conformity with
generally accepted accounting principles. Other financial information in the
report to shareholders is consistent with that in the consolidated financial
statements.

         The Company maintains accounting and internal control systems to
provide reasonable assurance at reasonable cost that assets are safeguarded
against loss from unauthorized use or disposition, and that the financial
records are reliable for preparing financial statements and maintaining
accountability for assets. These systems are augmented by written policies, an
organizational structure providing division of responsibilities, careful
selection and training of qualified personnel and a program of internal audits.

         The Company engaged Coopers & Lybrand L.L.P., independent accountants,
to audit and render an opinion on the consolidated financial statements in
accordance with generally accepted auditing standards. These standards include
an assessment of the systems of internal controls and tests of transactions to
the extent considered necessary by them to support their opinion.

         The Board of Directors, through its Audit Committee consisting solely
of outside directors of the Company, meets regularly with management, internal
auditors and our independent accountants to ensure that each is meeting its
responsibilities and to discuss matters concerning internal controls and
financial reporting. Coopers & Lybrand and the internal auditors each have full
and free access to the Audit Committee.


/s/ ROBERT E. WEISSMAN

Robert E. Weissman
Chairman &
Chief Executive Officer


/s/ VICTORIA R. FASH

Victoria R. Fash
Executive Vice President
& Chief Financial Officer


REPORT OF INDEPENDENT
ACCOUNTANTS          
--------------------------------------------------------------------------------
To the Shareholders and Board of Directors of Cognizant Corporation:

         We have audited the accompanying consolidated statements of financial
position of Cognizant Corporation as of December 31, 1996 and 1995, and the
related consolidated statements of income, shareholders' equity and cash flows
for the years ended December 31, 1996, 1995 and 1994. 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 in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Cognizant Corporation as of December 31, 1996 and 1995, and the consolidated
results of their operations and their cash flows for the three years ended
December 31, 1996, 1995 and 1994, in conformity with generally accepted
accounting principles.

         As discussed in Note 2 to the consolidated financial statements, in
1995, the Company adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed of".


/s/ COOPERS & LYBRAND LLP

Stamford, Connecticut
February 19, 1997


                                                                               7
<PAGE>

COGNIZANT CORPORATION

Consolidated Statements of Income
<TABLE>
<CAPTION>

                                                                                      Years Ended December 31,
                                                                           --------------------------------------------
Dollar amounts in thousands, except per share data                               1996             1995             1994
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>              <C>              <C>       
OPERATING REVENUE .......................................................  $1,730,596       $1,542,340       $1,257,415
Operating Costs .........................................................     746,781          753,466          516,895
Selling and Administrative Expenses .....................................     506,786          488,865          394,179
Depreciation and Amortization ...........................................     133,861          132,532          111,749
Restructuring Expense ...................................................          --           12,800            7,957
-----------------------------------------------------------------------------------------------------------------------
OPERATING INCOME ........................................................     343,168          154,677          226,635
-----------------------------------------------------------------------------------------------------------------------
Interest Income .........................................................       9,456           10,325            9,217
Interest Expense ........................................................      (1,338)            (540)            (715)
Gains from Dispositions .................................................         200           15,124           21,473
Other Expense--Net ......................................................      (2,465)         (17,029)         (11,122)
-----------------------------------------------------------------------------------------------------------------------
Non-Operating Income--Net ...............................................       5,853            7,880           18,853
-----------------------------------------------------------------------------------------------------------------------
Income Before Provision for Income Taxes ................................     349,021          162,557          245,488
Provision for Income Taxes ..............................................    (153,570)         (73,676)         (99,083)
-----------------------------------------------------------------------------------------------------------------------
NET INCOME ..............................................................  $  195,451       $   88,881       $  146,405
-----------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE OF COMMON STOCK ......................................  $     1.15       $      .52       $      .86
-----------------------------------------------------------------------------------------------------------------------
Average Number of Shares Outstanding .................................... 169,944,000      169,522,000      169,946,000
-----------------------------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

8
<PAGE>

COGNIZANT CORPORATION

Consolidated Statements of Financial Position
<TABLE>
<CAPTION>

                                                                                                  December 31,
                                                                                     -----------------------------------
Dollar amounts in thousands, except per share data                                         1996                    1995
------------------------------------------------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
<S>                                                                                  <C>                     <C>       
Cash and Cash Equivalents                                                            $  428,520              $  157,105
Accounts Receivable-Net                                                                 453,791                 432,957
Other Current Assets                                                                    112,151                 114,177
------------------------------------------------------------------------------------------------------------------------
   Total Current Assets                                                                 994,462                 704,239
------------------------------------------------------------------------------------------------------------------------
MARKETABLE SECURITIES AND OTHER INVESTMENTS                                             117,706                  33,201
------------------------------------------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT-NET                                                       268,888                 247,127
------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS-NET
Computer Software                                                                       139,040                 137,700
Goodwill                                                                                251,483                 230,888
Other Assets                                                                            103,403                  88,935
------------------------------------------------------------------------------------------------------------------------
   Total Other Assets-Net                                                               493,926                 457,523
------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                                         $1,874,982              $1,442,090
========================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts and Notes Payable                                                            $  46,923               $  60,966
Accrued and Other Current Liabilities                                                   276,682                 297,465
Accrued Income Taxes                                                                     63,416                  37,747
Deferred Revenues                                                                       292,970                 270,731
------------------------------------------------------------------------------------------------------------------------
   Total Current Liabilities                                                            679,991                 666,909
------------------------------------------------------------------------------------------------------------------------
POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS                                               50,519                  48,602
DEFERRED INCOME TAXES                                                                   105,074                  68,724
OTHER LIABILITIES AND MINORITY INTERESTS                                                166,785                  53,267
------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                                                     1,002,369                 837,502
========================================================================================================================
COMMITMENTS AND CONTINGENCIES
------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Preferred Stock, par value $.01 per share, authorized--
 10,000,000 shares; outstanding--none
Series Common Stock, par value $.01 per share, authorized--
 10,000,000 shares; outstanding--none
Common Stock, par value $.01 per share, authorized--400,000,000 shares;
 issued and outstanding 170,277,119 shares in 1996                                        1,703                      --
Capital Surplus                                                                         804,621                      --
Retained Earnings                                                                        65,989                      --
Treasury Stock, at cost, 800,000 shares                                                 (24,643)                     --
Cumulative Translation Adjustment                                                       (11,752)                  6,505
Unrealized Gains on Investments                                                          36,695                      --
Divisional Equity                                                                            --                 598,083
------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY                                                              872,613                 604,588
------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                           $1,874,982              $1,442,090
========================================================================================================================

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>



                                                                               9
<PAGE>


COGNIZANT CORPORATION

Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                         Years Ended December 31,
                                                                 -----------------------------------
Dollar amounts in thousands                                           1996         1995         1994
====================================================================================================
<S>                                                              <C>          <C>          <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income                                                       $ 195,451    $  88,881    $ 146,405
Reconciliation of Net Income to Net Cash
 Provided by Operating Activities:
  Depreciation and Amortization                                    133,861      132,532      111,749
  Write-off of Purchased In Process Research and Development .      33,233           --           --
  Gains From Dispositions                                             (200)     (15,124)     (21,473)
  Restructuring Provisions                                              --       12,800        7,957
  Restructuring Payments                                           (11,515)     (15,544)     (24,477)
  Non-Recurring Charge                                                  --       90,070           --
  Non-Recurring Charge Payments                                    (13,125)          --           --
  Postemployment Benefit Expense                                       666       37,632        1,427
  Postemployment Benefit Payments                                  (11,045)     (18,480)     (19,552)
  Net Increase in Accounts Receivable                              (19,576)     (83,035)     (72,796)
  Net Increase in Deferred Revenue                                  23,276       53,788       36,600
  Gartner Group Minority Interest (inclusive of R&D write-off)      11,710       14,696        8,358
  Deferred Income Taxes                                             16,566      (13,392)       5,189
  Net Increase (Decrease) in Accrued Income Taxes                   23,606      (35,994)      13,976
  Net (Increase) Decrease in Other Working Capital Items           (26,932)      48,527       14,254
  Other                                                             (3,953)      (8,818)       1,790
----------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities                          352,023      288,539      209,407
----------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Maturities of Marketable Securities                  193,392       40,338           --
Payments for Marketable Securities                                (165,791)     (70,546)          --
Proceeds from Sale of Businesses                                     1,565       11,349       20,700
Payments for Acquisition of Businesses                             (24,386)     (10,916)     (63,579)
Capital Expenditures                                               (74,963)     (77,032)    (104,475)
Additions to Computer Software                                     (49,395)     (70,565)     (60,241)
Increase in Other Investments--Net                                 (24,423)      (8,232)     (20,479)
Payments for Purchase of Gartner Group Stock                       (49,419)      (8,372)          --
Other                                                               35,355       45,807       21,947
----------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities                             (158,065)    (148,169)    (206,127)
----------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Exercise of Stock Options                                557           --           --
Proceeds from Issuance of Purchased Stock Options                    8,699           --           --
Other Stock Transactions with Employees                             14,377        5,149        2,293
Net Transfers from (to) The Dun & Bradstreet Corporation            44,880     (113,051)    (111,212)
Payment of Short-Term Debt                                         (50,000)          --           --
Other                                                               62,018       (8,193)       2,859
----------------------------------------------------------------------------------------------------
Net Cash Provided by (Used in) Financing Activities                 80,531     (116,095)    (106,060)
----------------------------------------------------------------------------------------------------
Effect of Exchange Rate Changes on Cash and Cash Equivalents .      (3,074)       4,846        9,699
----------------------------------------------------------------------------------------------------
Increase (Decrease) in Cash and Cash Equivalents                   271,415       29,121      (93,081)
Cash and Cash Equivalents, Beginning of Year                       157,105      127,984      221,065
----------------------------------------------------------------------------------------------------
Cash and Cash Equivalents, End of Year                           $ 428,520    $ 157,105    $ 127,984
====================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid During the Year for Interest                           $   1,463    $     425    $     925
Cash Paid During the Year for Income Taxes                       $  48,372    $  26,956    $  29,287


The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


10
<PAGE>
COGNIZANT CORPORATION

Consolidated Statements of Shareholders' Equity

<TABLE>
<CAPTION>

Dollar amounts in thousands
===================================================================================================================================
                                                                                                            UNREALIZED
                                                                                             CUMULATIVE       GAINS
THREE YEARS ENDED               DIVISIONAL    COMMON      CAPITAL   RETAINED    TREASURY     TRANSLATION        ON
DECEMBER 31, 1996                 EQUITY       STOCK      SURPLUS   EARNINGS      STOCK      ADJUSTMENT     INVESTMENTS      TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
<S>              <C>            <C>           <C>       <C>        <C>         <C>           <C>             <C>           <C>     
BALANCE, JANUARY 1, 1994        $587,060      $   --    $     --   $    --     $     --      $(46,227)       $    --       $540,833
-----------------------------------------------------------------------------------------------------------------------------------
Net Income                       146,405                                                                                    146,405
Net Transfers to The Dun &
 Bradstreet Corporation         (111,212)                                                                                  (111,212)
Change in Cumulative
 Translation Adjustment                                                                        30,457                        30,457
-----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1994       622,253          --          --        --           --       (15,770)            --        606,483
-----------------------------------------------------------------------------------------------------------------------------------
Net Income                        88,881                                                                                     88,881
Net Transfers to The Dun &
 Bradstreet Corporation         (113,051)                                                                                  (113,051)
Change in Cumulative
 Translation Adjustment                                                                        22,275                        22,275
-----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1995       598,083          --          --        --           --         6,505             --        604,588
-----------------------------------------------------------------------------------------------------------------------------------
Net Income                       129,462                                                                                    129,462
Net Transfers from The Dun &
 Bradstreet Corporation           44,880                                                                                     44,880
Change in Cumulative
 Translation Adjustment                                                                       (16,817)                      (16,817)
-----------------------------------------------------------------------------------------------------------------------------------
BALANCE, NOVEMBER 1, 1996             --       1,703     795,922        --      (25,200)      (10,312)            --        762,113
-----------------------------------------------------------------------------------------------------------------------------------
Net Income                                                          65,989                                                   65,989
Exercise of Stock Options                                                           557                                         557
Purchase of Stock Options                                  8,699                                                              8,699
Change in Cumulative
 Translation Adjustment                                                                        (1,440)                       (1,440)
Unrealized Gains on
  Investments                                                                                                 36,695         36,695
-----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1996            --      $1,703    $804,621   $65,989     $(24,643)     $(11,752)       $36,695       $872,613
===================================================================================================================================


The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


                                                                              11
<PAGE>

COGNIZANT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollar amounts in thousands
-------------------------------------------------------------------------------

Note 1. Basis of Presentation

         Cognizant Corporation (the "Company") integrates information and
technology to create business insight. I.M.S. International, Inc. ("IMS"), which
offers global information solutions to the pharmaceutical and healthcare
industries, and Nielsen Media Research, Inc., the leader in audience measurement
information for electronic media, are the principal operating units in the
marketing information services business segment. The other operating units
included in this segment are Pilot Software, Inc., Erisco, Inc., Cognizant
Technology Solutions Corporation, and Cognizant Enterprises, Inc. The Company's
majority-owned subsidiary, Gartner Group, Inc., the premier provider of research
and advisory services to the information technology industry, comprises the
Company's information technology services business segment.

         On November 1, 1996 (the "Distribution Date"), The Dun & Bradstreet
Corporation ("D&B") distributed to its shareholders all of the outstanding
shares of common stock of the Company, then a wholly-owned subsidiary of D&B
(the "Distribution"). In the Distribution, holders of D&B common stock received
one share of the Company's common stock for every share of D&B common stock
held.

         These financial statements reflect the financial position, results of
operations and cash flows of the Company as if it were a separate entity for all
periods presented. D&B's historical basis in the assets and liabilities of the
Company has been carried over.

         The financial statements also include allocations of certain D&B
corporate headquarters assets (including prepaid pension assets), liabilities
(including pension and postretirement benefits) and expenses (including cash
management, legal, accounting, tax, employee benefits, insurance services, data
services and other D&B corporate overhead) relating to the Company's businesses
that were transferred to the Company from D&B. Management believes these
allocations are reasonable. However, the financial information included herein
may not necessarily reflect the financial position, results of operations, and
cash flows had the Company been a separate entity for all periods presented.

--------------------------------------------------------------------------------

Note 2. Summary of Significant Accounting Policies

Consolidation. The consolidated financial statements of the Company include the
accounts of the Company and its subsidiaries after elimination of all material
intercompany accounts and transactions. Investments in companies over which the
Company has significant influence but not a controlling interest are accounted
for under the equity method of accounting. The financial statements of IMS and
its affiliates reflect a fiscal year ending November 30 to facilitate timely
reporting of the Company's financial results.

Cash Equivalents. The Company considers all highly liquid investments with a
maturity of 90 days or less at the time of purchase to be cash equivalents.

Marketable Securities. The Company values all marketable securities that mature
in more than 90 days at amortized cost (which approximates market value) as it
is management's intent to hold these instruments to maturity. Other marketable
securities, principally consisting of equity securities, are classified as
available-for-sale. Such securities are carried at fair value, with the
unrealized gains and losses, net of income taxes, reported as a component of
shareholders' equity. 

Property, Plant and Equipment. Buildings and machinery and equipment are
depreciated over their estimated useful lives using principally the
straight-line method. Leasehold improvements are amortized on a straight-line
basis over the shorter of the term of the lease or the estimated useful life of
the improvement.

Computer Software. Certain internal costs incurred in the development of
computer software are capitalized in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 86, "Accounting for the Costs of Computer
Software to be Sold, Leased, or Otherwise Marketed". Costs incurred to establish
technological feasibility of a computer software product are expensed in the
periods in which they are incurred. Capitalization ceases and amortization
starts when the product is available for general release to customers. Computer
software costs are being amortized, on a product by product basis, over three to
five years. Annual amortization is the greater of the amount computed using (a)
the ratio that gross revenues for a product bear to the total of current and
anticipated future gross revenues for that product or (b) the straight-line
method over the remaining estimated economic life of the product. At each
balance sheet date, the Company reviews the recoverability of the unamortized
capitalized costs of computer software products by comparing the carrying value
of computer software with its estimated net realizable value.

Goodwill. Goodwill represents the excess purchase price over the fair value of
identifiable net assets of businesses acquired and is amortized on a
straight-line basis over seven to forty years. At each balance sheet date, the
Company reviews the recoverability of goodwill, not identified with impaired
long-lived assets, based on estimated undiscounted future cash flows from
operating activities compared with the carrying value of goodwill and recognizes
any impairment on the basis of such comparison. The recognition and measurement
of goodwill impairment is assessed at the business unit level.

12
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Dollar amounts in thousands
--------------------------------------------------------------------------------

Other Assets. Other intangibles result from acquisitions and database
development and are included in other assets. Other intangibles are being
amortized, using principally the straight-line method, over five to fifteen
years.

         The Company adopted the provisions of SFAS No.121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" in
1995. This statement requires that long-lived assets and certain identifiable
intangibles held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. In general, this statement requires recognition of an
impairment loss when the sum of undiscounted expected future cash flows is less
than the carrying amount of such assets. The measurement for such impairment
loss is then based on the fair value of the asset. See Note 3 to the
Consolidated Financial Statements. 

Revenue Recognition. The Company recognizes revenue as earned, which is over the
contract period or as the information is delivered or related services are
performed. Amounts billed for service and subscriptions are credited to deferred
revenues and reflected in operating revenue over the subscription term, which is
generally one year. Software license revenue is recognized upon delivery of the
software and documentation when there are no significant remaining related
obligations. Revenue from post-contract customer support (maintenance) is
recognized on a straight-line basis over the term of the contract.

Foreign Currency Translation. The Company has significant investments in
non-U.S. countries. Therefore, changes in the value of foreign currencies affect
the Company's consolidated financial statements when translated into U.S.
dollars.

         For all operations outside the United States where the Company has
designated the local currency as the functional currency, assets and liabilities
are translated using end-of-year exchange rates; revenues and expenses are
translated using average rates of exchange. For these countries, currency
translation adjustments are accumulated in a separate component of shareholders'
equity whereas realized transaction gains and losses are recognized in other
expense--net. For operations in countries that are considered to be highly
inflationary, where the U.S. dollar is designated as the functional currency,
monetary assets and liabilities are translated using end-of-year exchange rates,
nonmonetary accounts are translated using historical exchange rates, and all
translation and transaction adjustments are recognized in other expense--net.

Income Taxes. Prior to the Distribution, the Company was included in the Federal
and certain state and non-U.S. income tax returns of D&B. The provision for
income taxes in the Company's financial statements has been calculated on a
separate-company basis. Income taxes paid on behalf of the Company by D&B, prior
to the Distribution, are included in Divisional Equity. 

Divisional Equity. Divisional Equity includes historical investments and
advances from D&B, including net transfers to/from D&B, third party liabilities
paid on behalf of the Company by D&B and amounts due to/from D&B for services
and other charges, as well as current period income through the Distribution
Date.

Estimates. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses and the disclosure of contingent assets and liabilities. Actual
results could differ from those estimates. Estimates are used for, but not
limited to, the accounting for: allowance for uncollectible accounts receivable,
depreciation and amortization, capitalized software costs, employee benefit
plans, taxes, restructuring reserves and contingencies. 

Earnings Per Share. Earnings per share of common stock were computed by dividing
net income by the weighted average number of shares of common stock outstanding
during the periods. The computation includes the weighted average number of
shares of D&B common stock outstanding through the Distribution Date, reflecting
the one-for-one distribution ratio, and the weighted average number of shares of
Cognizant common stock outstanding since the Distribution. The inclusion of
shares issuable under stock options in the calculation of earnings per share
would not result in material dilution. 

Concentrations of Credit Risk. IMS maintains accounts receivable balances
($237,279 and $252,067 at December 31, 1996 and 1995, respectively) principally
from customers in the pharmaceutical industry.

Reclassifications. Certain prior-year amounts have been reclassified to conform
with the 1996 presentation.

--------------------------------------------------------------------------------

Note 3. Non-Recurring Charges

         In the fourth quarter of 1995, the Company recorded within operating
costs a charge of $90,070. This charge primarily reflected an impairment loss in
connection with the adoption of the provisions of SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
($40,570), the write-off of certain computer software ($20,300), a provision for
postemployment benefits ($7,400) under the Company's severance plan and an
accrual for contractual obligations that have no future economic benefits
($21,800).

         SFAS No. 121 requires that long-lived assets and certain intangibles be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. In connection with
this

                                                                              13
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Dollar amounts in thousands
--------------------------------------------------------------------------------


review, the Company recorded an impairment loss of $40,570 reflecting the
revaluation of certain fixed assets, administrative and production systems and
other intangibles that were replaced or no longer used. In addition, the Company
recognized a charge of $20,300 principally related to the write-off of certain
computer software product lines at Pilot Software.

         The provision for postemployment benefits of $7,400 represented the
cost of workforce reductions. The accrual for contractual obligations that have
no future economic benefits of $21,800 related to the acquisition of certain
information and other services that were no longer used by the Company.

         This 1995 non-recurring charge evolved from D&B's annual budget and
strategic planning process, which included a review of D&B's underlying cost
structure, products and services and assets used in the business. Based upon
such analysis, management, having the authority to approve such business
decisions, committed in December 1995 to a plan to discontinue certain product
lines and dispose of certain other assets, resulting in the charge. These
decisions were not reversed or modified as a result of D&B's reorganization plan
relating to the Distribution, which was reviewed and, subject to certain
conditions, approved by the Board of Directors of D&B on January 9, 1996.

--------------------------------------------------------------------------------

Note 4. Restructuring

         In 1995, the Company recorded a $12,800 restructuring provision
primarily to write-off software for product lines that were discontinued at
Sales Technologies, a division of IMS.

         In the second quarter of 1994, the Company recorded a provision of
$7,957 to restructure certain operations and businesses, and to reduce costs and
increase operating efficiencies. These restructuring actions included office
consolidations, the closedown of Sales Technologies' European operations, and
additional steps to complete certain actions initiated in 1993.

         All restructuring actions were completed in 1996. The table below sets
forth the details of all restructuring accrual activity by major category for
the years ended December 31, 1995 and 1996.

<TABLE>
<CAPTION>

                                   JANUARY 1,                          CASH &      DECEMBER 31,      CASH    DECEMBER 31,
CATEGORY                              1995          EXPENSE        NONCASH ITEMS      1995          ITEMS       1996
-------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>              <C>             <C>          <C>           <C>
Real Estate Cost Reductions         $13,676             --           $(12,617)       $ 1,059      $ (1,059)      --
Discontinue Production and Data
 Collection Systems and Products        --          $12,800            (8,400)         4,400        (4,400)
Other                                11,783              --            (5,727)         6,056        (6,056)      --
-------------------------------------------------------------------------------------------------------------------------
Total                               $25,459         $12,800          $(26,744)       $11,515      $(11,515)      --
=========================================================================================================================
</TABLE>

--------------------------------------------------------------------------------

Note 5. Acquisitions

         In 1996, 1995 and 1994, the Company acquired various companies in
separate transactions that were accounted for as purchases.

         The aggregate cash purchase price of such acquisitions totaled $24,386
in 1996. The largest acquisition during 1996 was Gartner Group's acquisition of
J3 Learning Corporation ("J3"), a leading provider of software educational
materials for corporate and individual training. Gartner Group acquired all of
the outstanding shares of J3 for consideration of $8,000 in cash, approximately
$35,400 in Gartner Group Class A Common Stock, and options to purchase Gartner
Group Class A Common Stock, which had a value of $1,300.

         The aggregate purchase price of such acquisitions totaled $10,916 in
1995.

         The aggregate purchase price of such acquisitions totaled $63,579 in
1994. The largest acquisition during 1994 was Pilot Software, a leading provider
of on-line analytic processing software solutions that support business
decision-making needs across many industries.

         The results of operations of all purchases are included in the
Consolidated Statements of Income from the date of acquisition. Had the
acquisitions made in 1994, 1995 and 1996 been consummated on January 1 of the
year preceding the year of acquisition, the results of these acquired operations
would not have had a significant impact on the Company's consolidated results of
operations for any of the years presented.


14
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Dollar amounts in thousands
--------------------------------------------------------------------------------


Note 6. Marketable Securities

         Amounts included below are classified in the consolidated statements of
financial position as marketable securities. Cash equivalents have been excluded
from these disclosures.

                                                 December 31,
                                     -------------------------------------------
                                          1996                 1995
--------------------------------------------------------------------------------
                                                 FAIR                 Fair
                                      COST      VALUE      Cost      Value
--------------------------------------------------------------------------------
Debt Securities of States
 and Other Subdivisions
 of the U.S.
 Government                         $23,317    $23,317   $30,118    $30,118
Equity Securities                     4,357     58,320        --         --
--------------------------------------------------------------------------------
                                    $27,674    $81,637   $30,118    $30,118
================================================================================


         At December 31, 1996, cost and fair values of debt securities by
contractual maturity were as follows:

                                                            COST     FAIR VALUE
--------------------------------------------------------------------------------
Due in one year or less                                  $22,276        $22,276
Due after one year through five years                      1,041          1,041
--------------------------------------------------------------------------------
                                                         $23,317        $23,317
================================================================================

Note 7. Financial Instruments with Off-Balance-Sheet Risk

         The Company is a party to financial instruments with off-balance sheet
risk, which are entered into in the normal course of business to reduce exposure
to fluctuations in foreign currency exchange rates. The counterparties to these
instruments are major financial institutions. The Company is exposed to exchange
rate risk in the event of nonperformance by the counterparties to the financial
instruments; however, the Company does not anticipate such nonperformance. The
amount of such exposure is generally the unrealized gains in such contracts.

         Foreign exchange forward contracts are entered into to hedge against
foreign currency exchange movements on earnings and on certain assets and
liabilities of subsidiaries that are denominated in currencies other than the
subsidiary's functional currency. The forward contracts typically have
maturities of three months or less. At December 31, 1996, the Company had
approximately $315,000 in foreign exchange forward contracts outstanding, with
various expiration dates through January 1997. Foreign exchange forward
contracts are valued at market quotes, with the unrealized gains and losses on
these contracts included in other expense -- net. 

--------------------------------------------------------------------------------

Note 8. Pension and Postretirement Benefits

         Pension Plans. At the Distribution Date, the Company assumed
responsibility from D&B for pension and postretirement benefits for active U.S.
plan participants of the Company. The responsibility for retirees and terminated
vested employees remained with D&B. An allocation of assets and liabilities for
such benefits, which are not material, has been included in the consolidated
financial statements. The Company's non-U.S. subsidiaries provide retirement
benefits for employees consistent with local practices, primarily using defined
benefit or termination indemnity plans.

         The Company has established a defined benefit pension plan. This plan
covers all employees in the United States in certain of the Company's
businesses. The plan is a cash balance pension plan under which 6% of creditable
compensation plus interest is credited to eligible employee retirement accounts
on a monthly basis. At the time of retirement, the vested employee's account
balance is actuarially converted into an annuity. Pension costs are determined
actuarially and are funded to the extent allowable under the Internal Revenue
Code. Supplemental plans in the United States are maintained to provide
retirement benefits in excess of levels allowed by ERISA.

         Prior to the  Distribution,  the Company  accounted  for its
participation  in D&B's U.S.  pension plans as a multi-employer plan.

Consolidated pension costs are summarized as follows:

                                                 1996      1995      1994
--------------------------------------------------------------------------------
U.S. Plans--D&B Allocation                     $2,230    $1,241    $ (890)
U.S. Plans--Post Distribution                     291       --        --
Non-U.S. Plans                                  4,364     4,078     3,249
--------------------------------------------------------------------------------
Total Pension Cost                             $6,885    $5,319    $2,359
================================================================================

         In addition, during 1996 and 1994 the Company recognized pension
curtailment gains of $1,895 and $2,653 relating to a reduced level of
participation in the Company's supplemental plan and workforce reductions,
respectively.

<PAGE>

         The status of all defined benefit pension plans at December 31, 1996 is
as follows:



                                                       FUNDED        UNFUNDED
--------------------------------------------------------------------------------
Fair Value of Plan Assets                              $151,724         --
--------------------------------------------------------------------------------
Actuarial Present Value of Accumulated
 Benefit Obligation:
  Vested                                               (120,602)    $(4,857)
  Nonvested                                              (1,611)       (296)
--------------------------------------------------------------------------------
Accumulated Benefit Obligation                         (122,213)     (5,153)
Effect of Projected Future Salary
 Increases                                              (12,088)     (7,100)
--------------------------------------------------------------------------------
Projected Benefit Obligation                           (134,301)    (12,253)
--------------------------------------------------------------------------------
Plan Assets in Excess of
 (Less Than) Projected
 Benefit Obligation                                      17,423     (12,253)
Unrecognized Net Loss                                     3,652         478
Unrecognized Prior Service Cost (Credit)                 (6,547)        833
Unrecognized Net Transition (Asset)
 Obligation                                              (1,226)         49
Adjustment to Recognize Minimum Liability                   --         (123)
--------------------------------------------------------------------------------
Prepaid (Accrued) Pension Cost                         $ 13,302    $(11,016)
--------------------------------------------------------------------------------

                                                                             15
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Dollar amounts in thousands
--------------------------------------------------------------------------------

     The weighted average expected long-term rate of return on pension plan
assets was 9.31%, 9.82% and 9.75% for 1996, 1995 and 1994, respectively. At
December 31, 1996 and 1995, the projected benefit obligation was determined
using weighted average discount rates of 7.59% and 7.76%, respectively, and
weighted average rates of increase in future compensation levels of 4.59% and
5.06%, respectively. Plan assets are invested in diversified portfolios that
consist primarily of equity and debt securities.

     Certain employees of the Company in the United States also are eligible to
participate in the Company-sponsored defined contribution plan. The Company's
businesses make a matching contribution of 50% of the employee's contribution
based on specified limits of the employee's salary. The Company's expense
related to this plan was $4,075, $3,178 and $2,627 for the years 1996, 1995 and
1994, respectively.

     Additionally, Gartner Group has a savings and investment plan covering
substantially all domestic employees. Gartner Group contributes amounts to this
plan based upon the level of the employee contributions. Gartner Group also
contributes fixed and discretionary amounts based on employee participation and
attainment of operating margins specified by the Gartner Group Board of
Directors. Amounts expensed in connection with the plan totaled $3,200, $2,000
and $1,400 for 1996, 1995 and 1994, respectively.

     Postretirement Benefits. In addition to providing pension benefits, the
Company provides various health-care and life-insurance benefits for retired
employees. Employees at certain businesses of the Company in the United States
become eligible for these benefits if they attain 10 years of credited service
after age 45. The Company's future costs are limited based on a cost cap.
Certain of the Company's subsidiaries outside the United States have
postretirement benefit plans, although most participants are covered by
government-sponsored or administered plans. The cost of Company-sponsored
postretirement benefit plans outside the U.S. is not significant.

     Prior to the Distribution, the Company accounted for its participation in
D&B's U.S. postretirement plan as a multi-employer plan. Accordingly, the
Company has recorded postretirement benefits costs as allocated by D&B totaling
$2,289, $3,447 and $2,129 for the 10 month period ended October 31, 1996 and for
the years ended December 31, 1995 and 1994, respectively. Postretirement benefit
costs totalled $330 for the two month post-distribution period ended December
31, 1996. During 1994 the Company recognized a curtailment gain of $4,199
resulting from a change in eligibility requirements for the postretirement
medical plan.

     The status of postretirement benefit plans other than pensions at December
31, 1996 is as follows:

--------------------------------------------------------------------------------
Accumulated Postretirement Benefit Obligation:
 Active Employees--Eligible                                          $ (8,350)
 Active Employees--Not Yet Eligible                                    (6,530)
--------------------------------------------------------------------------------
Accumulated Postretirement Benefit Obligation                         (14,880)
Unrecognized Net Loss                                                     300
Unrecognized Prior Service Credit                                        (850)
--------------------------------------------------------------------------------
Accrued Postretirement Benefit Cost                                  $(15,430)
--------------------------------------------------------------------------------

     The accumulated postretirement benefit obligation at December 31, 1996 was
determined using a discount rate of 7.5%. The assumed rate of future increases
in per capita cost of covered health-care benefits is 8.0% in 1997, decreasing
gradually to 5.0% for the year 2021 and remaining constant thereafter.
Increasing the assumed health-care cost trend rate by one percentage point in
each year would increase the accumulated postretirement benefit obligation by
$1,800 and would increase annual aggregate service and interest costs by $300.

--------------------------------------------------------------------------------

Note 9. Employee Stock Plans

     Prior to the Distribution, certain employees of the Company were granted
stock options and limited stock appreciation rights in tandem with stock options
under D&B's Key Employees Stock Option Plans. These awards were granted at the
market price on the date of the grant.

     Immediately following the Distribution, outstanding awards under the D&B
Key Employees Stock Option Plans held by Company employees were cancelled and
replaced by substitute awards under the Company's Key Employees Stock Incentive
Plan (the "Plan"). This Plan provides for the grant of stock options to eligible
employees. In addition it provides an opportunity for the purchase of stock
options with a prepayment equal to ten percent of the exercise price, with the
remaining payment due when the options are exercised. All options have a life of
ten years, vest proportionally over six years and have an exercise price equal
to the fair market value of the common stock on the grant date.

     The substitute awards had the same ratio of the exercise price per option
to the market value per share, the same aggregate difference between market
value and exercise price and the same vesting provisions, option periods and
other terms and conditions as the options they replaced.

     In 1995 Pilot Software adopted an equity participation plan authorizing
Pilot Software to grant options for up to 19.5% of its stock to its employees.
The options are exercisable after nine years from the grant date at fair market
value, as determined by an appraisal; however, vesting may be accelerated based
on the occurrence of "trigger events" as defined by the plan. Two-thirds of the
authorized options 

16

<PAGE>

were outstanding at December 31, 1996, at exercise prices ranging from $1.75 to
$7.25 per share, which were the fair values at the dates of grant. None were
exercisable at December 31, 1996.

     Gartner Group has several stock option and stock purchase plans. The
exercise price of options granted under the plans is equal to the fair market
value at the date of grant of Gartner Group stock. Options outstanding and
exercisable were 18,370,318 and 5,068,133, respectively, at December 31, 1996,
at prices ranging from $.02 to $35.38 per share.

     In October 1995 the Financial Accounting Standards Board ("FASB") issued
SFAS No. 123, "Accounting for Stock-Based Compensation", which requires that
companies with stock-based compensation plans either recognize compensation
expense based on the fair value of options granted or continue to apply the
existing accounting rules and disclose pro forma net income and earnings per
share assuming the fair value method had been applied. The Company has chosen to
continue applying Accounting Principles Board Opinion No. 25 and related
interpretations in accounting for its plans. Accordingly, no compensation cost
has been recognized for the fixed stock option plans. Had compensation cost for
the Company's stock-based compensation plans been determined based on the fair
value at the grant dates for awards under those plans, consistent with the
method of SFAS No. 123, the Company's net income and earnings per share would
have been reduced to the pro forma amounts indicated below:

                                                    Year Ended December 31,
                                                --------------------------------
                                                     1996           1995
--------------------------------------------------------------------------------
Net Income               As reported               $195,451        $88,881
                         Pro forma                 $188,705        $88,120
Earnings Per Share       As reported                  $1.15          $0.52
                         Pro forma                    $1.11          $0.52
--------------------------------------------------------------------------------

Note: The pro forma disclosures shown above are not representative of the
effects on net income and earnings per share in future years.

     The fair value of the Company's stock options used to compute pro forma net
income and earnings per share disclosures is the estimated present value at
grant date using the Black-Scholes option pricing model. The following
weighted-average assumptions were used for options granted in 1996: dividend
yield of 0.3%; expected volatility of 25%; a risk-free interest rate of 6.0%;
and an expected term of 4.5 years. The weighted-average assumptions for D&B
options granted in 1995 were: dividend yield 4.7%; expected volatility 15%; a
risk-free interest rate of 5.6%; and an expected term of 5 years. The weighted
average fair value of the Company's stock options granted in 1996 is $9.76. The
weighted average fair value of D&B stock options granted in 1995 is $7.61.

     The fair value of Gartner Group stock options used to compute the Company's
pro forma net income and earnings per share disclosures was computed in the same
manner with the following weighted-average assumptions for 1996 and 1995:
dividend yield of 0%; expected volatility of 38%; a risk-free interest rate of
6.0%; and an expected term of 3.5 years. The weighted average fair values of
Gartner Group stock options granted in 1996 and 1995 are $11.80 and $5.82,
respectively.

     At December 31, 1996, outstanding options for Cognizant common stock held
by Company employees, including the substitute awards mentioned above, totaled
20,226,749, of which 2,168,714 of the substitute awards had vested and were
exercisable. The option prices range from $22.99 to $35.31 per share and are
exercisable over periods ending no later than 2006. At December 31, 1995,
outstanding options for D&B common stock held by Company employees totaled
1,936,436, of which 943,072 had vested and were exercisable. The option prices
ranged from $33.55 to $63.75 per share.

                                                                    WEIGHTED
                                                                     AVERAGE
                                                        SHARES    EXERCISE PRICE
--------------------------------------------------------------------------------
Options Outstanding,
 November 1, 1996                                       3,340,778     $31.13

Granted                                                14,209,500     $33.37
Purchased                                               2,702,700     $33.37
Exercised                                                 (18,467)    $30.17
Expired                                                    (7,762)    $33.75
--------------------------------------------------------------------------------
Options Outstanding,
 December 31, 1996                                     20,226,749     $33.00
================================================================================

Note 10. Income Taxes

Income before provision for income taxes consisted of:

                                                    1996      1995        1994
--------------------------------------------------------------------------------
U.S.                                              $162,128  $ 43,495    $111,054
Non-U.S.                                           186,893   119,062     134,434
--------------------------------------------------------------------------------
                                                  $349,021  $162,557    $245,488
================================================================================

The provision (benefit) for income taxes consisted of:

                                                    1996      1995        1994
--------------------------------------------------------------------------------
U.S. Federal and State:
Current                                          $ 53,489   $57,596     $54,161 
Deferred                                           31,178   (23,871)     (2,377)
--------------------------------------------------------------------------------
Non-U.S.:                                          84,667    33,725      51,784 
--------------------------------------------------------------------------------
Current                                            61,880    33,632      40,643
Deferred                                            7,023     6,319       6,656
--------------------------------------------------------------------------------
                                                   68,903    39,951      47,299
--------------------------------------------------------------------------------
Total                                            $153,570   $73,676     $99,083
================================================================================

     The following table summarizes the significant differences between the U.S.
Federal statutory taxes and the

                                                                             17

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Dollar amounts in thousands
--------------------------------------------------------------------------------


Company's provision for income taxes for consolidated financial statement
purposes.

                                                 1996      1995        1994
--------------------------------------------------------------------------------
Tax Expense at Statutory Rate                  $122,157   $56,895     $85,922
State and Local Income Taxes,
 net of Federal Tax Benefit                      12,729    13,079       9,536
Non-U.S. Taxes                                    2,939    (3,684)       (941)
Purchased In-Process R&D Costs                   11,632      --           --
Goodwill                                          3,709     4,457       1,585
Other                                               404     2,929       2,981
--------------------------------------------------------------------------------
Total Taxes                                    $153,570   $73,676     $99,083
================================================================================


     The Company's deferred tax assets (liabilities) are comprised of the
following at December 31:

                                                   1996         1995
--------------------------------------------------------------------------------
Deferred Tax Assets:                           
 Operating Losses                              $ 34,225     $ 20,817
 Non-Recurring Charges                            5,440       12,840
 Postretirement Benefits                          5,274        2,608
 Postemployment Benefits                          4,969        1,138
 Bad Debts                                        2,488        2,754
 Restructuring Costs                                 --       12,138
 Other                                            9,006        2,326
--------------------------------------------------------------------------------
                                                 61,402       54,621
Valuation Allowance                             (29,784)     (20,817)
--------------------------------------------------------------------------------
                                                 31,618       33,804
--------------------------------------------------------------------------------
Deferred Tax Liabilities:                      
 Intangibles                                    (67,818)     (62,473)
 Marketable Securities                          (17,268)          --
 Deferred Revenue                               (16,966)     (17,385)
 Depreciation                                   (12,223)      (2,350)
 Other                                           (7,442)      (3,494)
--------------------------------------------------------------------------------
                                               (121,717)     (85,702)
--------------------------------------------------------------------------------
Net Deferred Tax Liability                     $(90,099)    $(51,898)
================================================================================
                                               
     The 1996 net deferred tax liability consists of a non-current deferred tax
liability of $105,074, offset by a current deferred tax asset of $14,975
included in Other Current Assets. (See Note 15 to the Consolidated Financial
Statements.)

     The Company has established a valuation allowance attributable to deferred
tax assets in certain U.S. state and non-U.S. tax jurisdictions where, based on
available evidence, it is more likely than not that such assets will not be
realized.

     Undistributed earnings of non-U.S. subsidiaries aggregated approximately
$414,000 at December 31, 1996. Deferred tax liabilities have not been recognized
for these undistributed earnings because it is the Company's intention to
permanently reinvest such undistributed earnings outside the U.S. If such
earnings are repatriated in the future, or are no longer deemed to be
permanently reinvested, applicable taxes will be provided for on such amounts.
It is not currently practicable to determine the amount of applicable taxes.

--------------------------------------------------------------------------------

Note 11. Lease Commitments

     Certain of the Company's operations are conducted from leased facilities,
which are under operating leases. Rental expense under real estate operating
leases for the years 1996, 1995 and 1994 was $37,805, $34,997, and $30,670,
respectively. The totals include $387, $446 and $32 in 1996, 1995 and 1994,
respectively, for facilities usage charged by D&B or an affiliate. The minimum
annual rental expense for real estate operating leases that have remaining
noncancelable lease terms in excess of one year, net of sublease rentals, at
December 31, 1996 was: 1997 -- $37,517; 1998 -- $34,420; 1999 -- $30,267; 2000
-- $27,036; 2001 -- $24,979 and an aggregate of $44,327 thereafter.

     The Company also leases or participates in leases of certain computer and
other equipment under operating leases. These leases are frequently renegotiated
or otherwise changed as advancements in computer technology produce
opportunities to lower costs and improve performance. Rental expense under
computer and other equipment leases was $25,304, $21,864, and $18,538 for 1996,
1995 and 1994, respectively. At December 31, 1996, the minimum annual rental
expense for computer and other equipment under operating leases that have
remaining noncancelable lease terms in excess of one year was: 1997 -- $23,084;
1998 -- $17,900; 1999 -- $12,649; 2000 -- $4,318; 2001 -- $1,571 and an
aggregate of $60 thereafter.

     The Company has agreements with various third parties to purchase certain
data processing and telecommunications services, extending beyond one year. At
December 31, 1996, the purchases covered by these agreements aggregated: 1997 --
$12,978; 1998 -- $13,578; 1999 -- $13,638 and 2000 -- $5,880.

--------------------------------------------------------------------------------

Note 12. Other Transactions with Affiliates

     Prior to the Distribution, D&B provided certain centralized services (see
Note 1 to the Consolidated Financial Statements) to the Company. Expenses
related to these services were allocated to the Company based on utilization of
specific services or, where not estimable, based on assets employed by the
Company in proportion to D&B's total assets. Management believes these
allocation methods are reasonable. These allocations (including data service
charges beginning in 1995) were $107,200, $116,900, and $65,100 in 1996, 1995,
and 1994, respectively, and are included in operating costs and selling and
administrative expenses in the Consolidated Statements of Income.
Amounts due to D&B for these expenses are included in Divisional Equity.

     Net transfers to or from D&B, included in Divisional Equity, include
advances and loans from affiliates, net cash transfers to or from D&B, third
party liabilities paid on behalf of the Company by D&B, amounts due to or from
D&B for services and other charges, and income taxes paid on behalf of the
Company by D&B. No interest has been charged on these transactions. The weighted
average balance due from D&B

18

<PAGE>


was $466,938, $452,693, and $365,120 for 1996, 1995 and 1994, respectively.

     The activity in the net transfers from (to) D&B account for the periods
through the Distribution Date included in Divisional Equity in the Consolidated
Statements of Shareholders' Equity is summarized as follows:

                                            TEN MONTHS
                                                ENDED          YEAR ENDED
                                              OCTOBER 31,      DECEMBER 31,
                                                 1996        1995        1994
--------------------------------------------------------------------------------
D&B Services and Other Charges                $ 111,806    $ 121,673  $  52,801
Loans and Advances--Net                         137,639       44,917   (124,561)
U.S. Income Taxes                                35,434       57,596     54,161
Cash Transfers--Net                            (239,999)    (337,237)   (93,613)
--------------------------------------------------------------------------------
Net Transfers from (to) D&B                   $  44,880    $(113,051) $(111,212)
--------------------------------------------------------------------------------

     Additionally, the Company, D&B and third party investors have in the past
contributed assets to a limited partnership in which they are partners. The
partnership is a separate legal entity engaged in the business of licensing
database assets and software.

     In connection with the Distribution the Company received 800,000 shares of
new D&B common stock and 266,666 shares of ACNielsen Corporation ("ACNielsen")
common stock. In December 1996 the Company sold such shares to D&B and
ACNielsen, at fair market value, for $18,560 and $3,967, respectively. In
addition, the Company assumed $69,000 of liabilities (included in Other
Liabilities and Minority Interests) which are subject to adjustment in
accordance with the Distribution Agreement, related to certain prior business
transactions, and $50,000 of short-term debt, which was repaid in December 1996.

     For purposes of governing certain of the ongoing relationships between the
Company, D&B and ACNielsen after the Distribution and to provide for an orderly
transition, the Company, D&B and ACNielsen have entered into various agreements
including a Distribution Agreement, Tax Allocation Agreement, Employee Benefits
Agreement, Indemnity and Joint Defense Agreement, Television Audience
Measurement Master Agreement, Intellectual Property Agreement, Shared
Transaction Services Agreement, Data Services Agreement and Transition Services
Agreement. Among other things, the agreements set forth principles to be applied
in allocating certain Distribution-related costs and specify portions of
contingent liabilities to be shared if certain amounts are exceeded.

--------------------------------------------------------------------------------

Note 13. Capital Stock

     Under a Shareholder Rights Plan adopted by the Board of Directors, each
certificate for a share of the Company's common stock also represents one
Preferred Share Purchase Right (a "Right"). In the event a person or group (an
"Acquiring Person") acquires beneficial ownership of, or commences or announces
an intention to make a tender offer for more than 15% of the outstanding shares
of common stock, each Right entitles the holder to purchase one one-thousandth
of a share of Series A Junior Participating Preferred Stock at $210 per each one
one-thousandth of a share (the "Purchase Price"). In the event a person or group
becomes an Acquiring Person, or the Company is acquired in a merger or other
business combination or 50% or more of its assets or earning power are sold,
each holder of a Right (other than an Acquiring Person) has the right to receive
common stock of the Company or the entity that engaged in such transaction, as
applicable, which has a market value of two times the Purchase Price. The
Rights, which do not have voting rights and are subject to adjustment in certain
circumstances, expire on October 23, 2006 and are redeemable by the Company at a
price of $.01 per Right under certain circumstances.

--------------------------------------------------------------------------------

Note 14. Litigation

     The Company and its subsidiaries are involved in legal proceedings and
litigation arising in the ordinary course of business. In the opinion of
management, the outcome of such current legal proceedings and litigation, if
decided adversely, could have a material effect on quarterly or annual operating
results or cash flows when resolved in a future period. However, in the opinion
of management, these matters will not materially affect the Company's
consolidated financial position.

     In addition, on July 29, 1996, Information Resources, Inc. ("IRI") filed a
complaint in the United States District Court for the Southern District of New
York, naming as defendants D&B, A.C. Nielsen Company and IMS (the "IRI Action").

     The complaint alleges various violations of the United States antitrust
laws, including alleged violations of Sections 1 and 2 of the Sherman Act. The
complaint also alleges a claim of tortious interference with a contract and a
claim of tortious interference with a prospective business relationship. These
claims relate to the acquisition by defendants of Survey Research Group Limited
("SRG"). IRI alleges that SRG violated an alleged agreement with IRI when it
agreed to be acquired by defendants and that the defendants induced SRG to
breach that agreement.

     IRI's complaint alleges damages in excess of $350,000, which amount IRI has
asked to be trebled under the antitrust laws. IRI also seeks punitive damages in
an unspecified amount.

                                                                             19
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Dollar amounts in thousands, except per share data
--------------------------------------------------------------------------------

     In connection with the IRI Action, D&B, ACNielsen Corporation (the parent
company of A.C. Nielsen Company) and the Company have entered into an Indemnity
and Joint Defense Agreement (the "Indemnity and Joint Defense Agreement")
pursuant to which they agree (i) to certain arrangements allocating potential
liabilities ("IRI Liabilities") that may arise out of or in connection with the
IRI Action and (ii) to conduct a joint defense of such action. In particular,
the Indemnity and Joint Defense Agreement provides that ACNielsen will assume
exclusive liability for IRI Liabilities up to a maximum amount to be calculated
at the time such liabilities, if any, become payable (the "ACN Maximum Amount"),
and that the Company and D&B will share liability equally for any amounts in
excess of the ACN Maximum Amount. The ACN Maximum Amount will be determined by
an investment banking firm as the maximum amount which ACNielsen is able to pay
after giving effect to (i) any plan submitted by such investment bank which is
designed to maximize the claims paying ability of ACNielsen without impairing
the investment banking firm's ability to deliver a viability opinion (but which
will not require any action requiring stockholder approval), and (ii) payment of
related fees and expenses. For these purposes, financial viability means the
ability of ACNielsen, after giving effect to such plan, the payment of related
fees and expenses and the payment of the ACN Maximum Amount, to pay its debts as
they become due and to finance the current and anticipated operating and capital
requirements of its business, as reconstituted by such plan, for two years from
the date any such plan is expected to be implemented.

     Management of the Company is unable to predict at this time the final
outcome of this matter or whether the resolution of this matter could materially
affect the Company's results of operations, cash flows or financial position.

--------------------------------------------------------------------------------

Note 15. Supplemental Financial Data

Accounts Receivable--Net:

                                                           1996         1995
--------------------------------------------------------------------------------
Trade                                                    $401,224     $386,941
Less: Allowance for Doubtful Accounts                     (15,470)     (11,446)
Unbilled Receivables                                       35,383       39,476
Other                                                      32,654       17,986
--------------------------------------------------------------------------------
                                                         $453,791     $432,957
================================================================================

Other Current Assets:

                                                           1996         1995
--------------------------------------------------------------------------------
Deferred Income Taxes                                  $ 14,975     $ 16,826
Prepaid Expenses                                         48,531       42,759
Inventories                                              26,369       24,474
Marketable Securities                                    22,276       30,118
--------------------------------------------------------------------------------
                                                       $112,151     $114,177
================================================================================

Property, Plant and Equipment--Net, carried at cost, less accumulated
depreciation and amortization:

                                                   1996         1995
--------------------------------------------------------------------------------
Buildings                                      $118,122     $125,536        
Machinery and Equipment                         402,424      363,305
Less: Accumulated Depreciation                 (287,200)    (281,226)
Leasehold Improvements, less:                
 Accumulated Amortization of                 
 $20,199 and $16,117                             23,282       26,276
Land                                             12,260       13,236
--------------------------------------------------------------------------------
                                               $268,888     $247,127
================================================================================

Computer Software and Goodwill:              
                                               COMPUTER
                                               SOFTWARE     GOODWILL
--------------------------------------------------------------------------------
January 1, 1995                                $124,201     $250,127
Additions at Cost                                70,565       11,799
Amortization                                    (39,221)     (16,167)
Other Deductions, Additions                  
 and Reclassifications                          (17,845)     (14,871)
-------------------------------------------------------------------------------
December 31, 1995                               137,700      230,888
Additions at Cost                                49,395       60,484
Amortization                                    (39,802)     (17,094)
Other Deductions and                         
 Reclassifications                               (8,253)     (22,795)
--------------------------------------------------------------------------------
DECEMBER 31, 1996                              $139,040     $251,483
--------------------------------------------------------------------------------

     Accumulated amortization of computer software and goodwill was $217,847 and
$164,829 at December 31, 1996 and 1995, respectively.

Accounts and Notes Payable:

                                                    1996         1995
--------------------------------------------------------------------------------
Trade                                            $25,763      $28,562
Taxes Other Than Income Taxes                     15,587       14,420
Notes                                                464        7,424
Other                                              5,109       10,560
--------------------------------------------------------------------------------
                                                 $46,923      $60,966
================================================================================



















     The weighted average interest rates on notes payable at December 31, 1996
and 1995 were 6.4% and 4.4%, respectively. The Company has short-term borrowing
agreements with several banks to provide up to $52,300 of borrowings at December
31, 1996. None of these arrangements had material commitment fees or
compensating balance requirements.

 Accrued and Other Current Liabilities:

                                                   1996         1995
--------------------------------------------------------------------------------
Salaries, Wages, Bonuses and
 Other Compensation                              $ 78,676     $ 77,218
Restructuring Costs                                    --       11,515
Postemployment Benefits                             7,995       36,582
Other                                             190,011      172,150
--------------------------------------------------------------------------------
                                                 $276,682     $297,465
================================================================================

20
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Dollar amounts in thousands
--------------------------------------------------------------------------------
Note 16. Operations by Business Segments

The Company, operating globally, delivers information, software and related
services principally through two business segments referenced below.

<TABLE>
<CAPTION>

                                                                           MARKETING        INFORMATION
                                                                          INFORMATION       TECHNOLOGY
Year Ended December 31, 1996                                             SERVICES (1)        SERVICES           TOTAL
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>                <C>             <C> 
OPERATING REVENUE                                                         $1,306,214         $424,382        $1,730,596
SEGMENT OPERATING INCOME (2)                                              $  319,385         $ 60,114        $  379,499
General Corporate Expenses                                                                                       36,331
Non-Operating Income--Net                                                                                         5,853
-----------------------------------------------------------------------------------------------------------------------
Income Before Provision for Income Taxes                                                                     $  349,021
Segment Depreciation and Amortization( 3)                                 $  117,723         $ 15,934        $  133,657
Segment Capital Expenditures                                              $   59,045         $ 15,918        $   74,963
IDENTIFIABLE ASSETS AT DECEMBER 31, 1996 (4)                              $1,113,523         $499,817        $1,613,340
=======================================================================================================================
Year Ended December 31, 1995
-----------------------------------------------------------------------------------------------------------------------
OPERATING REVENUE                                                         $1,204,701         $337,639        $1,542,340
Restructuring Expense  (5)                                                $   12,800               --        $   12,800
SEGMENT OPERATING INCOME (6)(7)                                           $  158,037         $ 51,180        $  209,217
General Corporate Expenses (8)                                                                                   54,540
Non-Operating Income--Net                                                                                         7,880
-----------------------------------------------------------------------------------------------------------------------
Income Before Provision for Income Taxes                                                                     $  162,557
Segment Depreciation and Amortization (3)                                 $  120,545         $ 11,987        $  132,532
Segment Capital Expenditures                                              $   45,975         $ 19,657        $   65,632
IDENTIFIABLE ASSETS AT DECEMBER 31, 1995 (4)                              $1,025,787         $355,088        $1,380,875
=======================================================================================================================
Year Ended December 31, 1994
-----------------------------------------------------------------------------------------------------------------------
OPERATING REVENUE                                                         $1,019,160         $238,255        $1,257,415
Restructuring Expense (5)                                                 $    7,957               --        $    7,957
SEGMENT OPERATING INCOME                                                  $  228,864         $ 34,185        $  263,049
General Corporate Expenses                                                                                       36,414
Non-Operating Income--Net                                                                                        18,853
-----------------------------------------------------------------------------------------------------------------------
Income Before Provision for Income Taxes                                                                     $  245,488
Segment Depreciation and Amortization (3)                                 $  101,826          $ 9,923        $  111,749
Segment Capital Expenditures                                              $   74,686          $ 5,273        $   79,959
IDENTIFIABLE ASSETS AT DECEMBER 31, 1994 (4)                              $1,008,507         $275,272        $1,283,779
=======================================================================================================================

</TABLE>

(1)  IMS's Operating Revenue was $904,444 in 1996, $818,537 in 1995 and $691,060
     in 1994.

(2)  Information Technology Services 1996 Operating Income includes a one-time
     acquisition-related charge of $33,233 related to Gartner Group's
     Acquisition of J3.

(3)  Includes depreciation and amortization of Property, Plant and Equipment,
     Computer Software, Other Intangibles and Goodwill. For the year-ended 1996,
     segment depreciation and amortization excludes $204 related to Corporate
     office depreciation for the two month post-Distribution period.

(4)  Assets of $261,642, $61,215 and $47,259 at December 31, 1996, 1995 and
     1994, respectively, include Cash and Cash Equivalents and Property, Plant &
     Equipment not identified with business segments and represent the
     reconciling items between total Identifiable Assets shown and the Company's
     total assets.

(5)  See Note 4 to the Consolidated Financial Statements.

(6)  Marketing Information Services 1995 Operating Income includes a
     non-recurring charge of $72,870 (See Note 3 to the Consolidated Financial
     Statements) and an incremental provision for postemployment benefits of
     $24,300.

(7)  Information Technology Services 1995 Operating Income includes an
     incremental provision for postemployment benefits of $8,200.

(8)  General Corporate Expenses include $17,200 of non-recurring charges in
     1995, principally related to Corporate-owned Property, Plant & Equipment.
     See Note 3 to the Consolidated Financial Statements.


                                                                             21
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Dollar amounts in thousands
--------------------------------------------------------------------------------
Note 17. Operations by Geographic Area

Financial information by geographic area is summarized as follows. Inter-area
sales were not significant.

<TABLE>
<CAPTION>

                                                                                              OTHER
                                                       UNITED STATES        EUROPE           NON-U.S.           TOTAL
-----------------------------------------------------------------------------------------------------------------------
1996
-----------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>               <C>              <C>               <C>
OPERATING REVENUE                                       $  950,526        $  505,969       $  274,101        $1,730,596
OPERATING INCOME (1)                                    $  131,402        $  120,119       $   91,647        $  343,168
IDENTIFIABLE ASSETS                                     $1,051,857        $  396,038       $  165,445        $1,613,340
=======================================================================================================================
1995
-----------------------------------------------------------------------------------------------------------------------
Operating Revenue                                       $  834,786        $  460,320       $  247,234        $1,542,340
Restructuring Expense (2)                               $   12,800                --               --        $   12,800
Operating Income (3)                                    $   45,149        $   52,694       $   56,834        $  154,677
Identifiable Assets                                     $  834,003        $  405,059       $  141,813        $1,380,875
=======================================================================================================================
1994
-----------------------------------------------------------------------------------------------------------------------
Operating Revenue                                       $  656,701        $  403,423       $  197,291        $1,257,415
Restructuring Expense (2)                               $    5,047        $    2,910               --        $    7,957
Operating Income                                        $  129,830        $   59,338       $   37,467        $  226,635
Identifiable Assets                                     $  800,691        $  375,666       $  107,422        $1,283,779
=======================================================================================================================

</TABLE>

(1)  1996 Operating Income in the U.S. includes a one-time acquisition-related
     charge of $33,233 related to Gartner Group's acquisition of J3.

(2)  See Note 4 to the Consolidated Financial Statements.

(3)  1995 Operating Income includes a non-recurring charge of $90,070 ($60,440
     in the U.S., $27,000 in Europe, and $2,630 in Other Non-U.S.) (See Note 3
     to the Consolidated Financial Statements) and an incremental provision for
     postemployment benefits of $32,500 ($18,000 in the U.S., $13,100 in Europe,
     and $1,400 in Other Non-U.S.).

22
<PAGE>


<TABLE>

<CAPTION>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Dollar amounts in thousands, except per share data
----------------------------------------------------------------------------------------------------------------------
Note 18. Quarterly Financial Data (Unaudited)

                                                               THREE MONTHS ENDED                                 
                                         ------------------------------------------------------------              FULL
                                         MARCH 31          JUNE 30      SEPTEMBER 30      DECEMBER 31              YEAR
-----------------------------------------------------------------------------------------------------------------------
1996
-----------------------------------------------------------------------------------------------------------------------
<S>                                      <C>              <C>               <C>              <C>             <C>       
OPERATING REVENUE                        $370,019         $415,703          $424,188         $520,686        $1,730,596
OPERATING INCOME (1)                     $ 58,978         $ 81,912          $ 60,195         $142,083        $  343,168
NET INCOME                               $ 33,277         $ 42,875          $ 39,858         $ 79,441        $  195,451
EARNINGS PER SHARE                       $    .20         $    .25          $    .23         $    .47        $     1.15
-----------------------------------------------------------------------------------------------------------------------
1995
-----------------------------------------------------------------------------------------------------------------------
Operating Revenue                        $347,519         $362,230          $374,521         $458,070        $1,542,340
Restructuring Expense                    $     --         $     --          $ 12,800         $     --        $   12,800
Operating Income (2)(3)                  $ 47,881         $ 67,026          $ 34,450         $  5,320        $  154,677
Net Income                               $ 25,853         $ 37,290          $ 15,485         $ 10,253        $   88,881
Earnings Per Share                       $    .15         $    .22          $    .09         $    .06        $      .52
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Includes a one-time acquisition-related charge of $33,233 related to
     Gartner Group's acquisition of J3 in the third quarter.

(2)  Includes a non-recurring charge of $90,070 in the fourth quarter. (See Note
     3 to the Consolidated Financial Statements)

(3)  Includes an incremental provision for postemployment benefits of $32,500 in
     the third quarter.

                                                                              23

<PAGE>
 


<TABLE>

<CAPTION>


FIVE-YEAR SELECTED FINANCIAL DATA

Dollar amounts in thousands, except per share data


                                                                                                                     1992
                                                1996              1995             1994              1993     (unaudited)
-------------------------------------------------------------------------------------------------------------------------
RESULTS OF OPERATIONS:
<S>                                       <C>               <C>              <C>               <C>               <C>     
   Operating Revenue                      $1,730,596        $1,542,340       $1,257,415        $1,039,259        $909,566
   Costs and Expenses (1)(2)               1,387,428         1,387,663        1,030,780           897,909         765,159
-------------------------------------------------------------------------------------------------------------------------
   Operating Income (1)(2)                   343,168           154,677          226,635           141,350         144,407
   Non-Operating
   Income--Net (3)                             5,853             7,880           18,853            25,982           3,092
-------------------------------------------------------------------------------------------------------------------------
   Income Before Provision for
    Income Taxes                             349,021           162,557          245,488           167,332         147,499
   Provision for Income Taxes               (153,570)          (73,676)         (99,083)          (58,475)        (60,152)
-------------------------------------------------------------------------------------------------------------------------
Income Before Cumulative Effect of
 Accounting Changes                          195,451            88,881          146,405           108,857          87,347
Cumulative Effect of Accounting
 Changes, Net of income Taxes (4)                 --                --               --           (41,143)             --
-------------------------------------------------------------------------------------------------------------------------
Net Income                                 $ 195,451         $  88,881        $ 146,405         $  67,714        $ 87,347
-------------------------------------------------------------------------------------------------------------------------
Earnings Per Share of Common Stock         $    1.15         $     .52        $     .86                --              --
-------------------------------------------------------------------------------------------------------------------------
Average Number of Shares Outstanding     169,944,000       169,522,000      169,946,000                --              --
-------------------------------------------------------------------------------------------------------------------------
As a % of Operating Revenue:
 Operating Income                               19.8              10.0             18.0              13.6            15.9
 Income Before Cumulative Effect of
   Accounting Changes                           11.3               5.8             11.6              10.5             9.6
-------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY                       $ 872,613         $ 604,588        $ 606,483         $ 540,833        $483,005
-------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                              $1,874,982        $1,442,090       $1,331,038        $1,158,764        $894,336
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  1996 includes a one-time acquisition-related charge of $33,233
     related to Gartner Group's acquisition of J3.

(2)  1995 includes a non-recurring charge of $90,070 (See Note 3 to the
     Consolidated Financial Statements) and an incremental provision for
     postemployment benefits of $32,500. Also includes restructuring expense of
     $12,800, $7,957, $46,408 and $769 in 1995, 1994, 1993 and 1992,
     respectively. (See Note 4 to the Consolidation Financial Statements).

(3)  Includes gains from dispositions of $200, $15,124, $21,473
     and $21,022 in non-operating income in 1996, 1995, 1994 and 1993,
     respectively.

(4)  1993 includes the impact of $28,303 for the adoption of SFAS No.112 and
     $12,840 for the adoption of SFAS No.106.

24
<PAGE>


COGNIZANT CORPORATION
-------------------------------------------------------------------------------
DIRECTORS
-------------------------------------------------------------------------------
CLIFFORD L. ALEXANDER, JR. (1)                        H. EUGENE LOCKHART (1)
President                                             President
Alexander & Associates, Inc.                          BankAmerica Corp.
(Consulting Firm specializing in work force           Retail Banking Division
inclusiveness)                                        (Financial Services)

JOHN P. IMLAY, JR. (2)
Chairman
Imlay Investments, Inc.
(Private Venture Capital Investments)

ROBERT KAMERSCHEN (2)
Chairman & Chief Executive Officer
ADVO, Inc.
(Direct Mail Marketing Services)

ROBERT J. LANIGAN (1)
Chairman Emeritus
Former Chairman & Chief Executive Officer
Owens-Illinois, Inc.
(Glass, Paper, Plastics and Other Packaging Products)

JAMES R. PETERSON (2)
Former President & Chief Executive Officer
The Parker Pen Company
(Writing Instruments and Temporary Help Services)

M. BERNARD PUCKETT (2)
Private Investor

ROBERT E. WEISSMAN
Chairman & Chief Executive Officer
Cognizant Corporation

Board Committees
(1) Audit Committee
(2) Compensation and Benefits Committee

OFFICERS

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------
Chairman & Chief Executive Officer
ROBERT E. WEISSMAN
-------------------------------------------------------------------------------
<S>                                           <C>                                   <C>

Executive Vice Presidents

VICTORIA R. FASH                              WILLIAM G. JACOBI
Chief Financial Officer                       Chairman, IMS International and
                                               Nielsen Media Research
----------------------------------------------------------------------------------------------------
Senior Vice Presidents

HANS B. AMELL                                 RANDALL C. HARRIS                     ALAN J. KLUTCH
Marketing                                     Human Resources                       Finance

JAMES C. MALONE                               SUSAN H. REYNOLDS                     KENNETH S. SIEGEL
Finance & Controller                          Corporate Secretary                   General Counsel
-----------------------------------------------------------------------------------------------------
Vice President

LESLYE G. KATZ
Treasurer

OFFICERS OF OPERATING UNITS
--------------------------------------------------------------------------------------------------
IMS International                       Gartner Group                         Erisco
WILLIAM G. JACOBI                       MANUEL A. FERNANDEZ                   ANTHONY BELLOMO
Chairman                                Chairman,                             President

TOMMY BOHMAN
Vice Chairman, IMS & President, IMS America

RENE DERECQUE
Pilot Software

HANS B. AMELL
President & Chief Executive Officer

Cognizant Technology Solutions
WIJEYARAJ A. MAHADEVA
Chairman & Chief Executive Officer

HANS B. AMELL
President & Chief Executive Officer

Nielsen Media Research

WILLIAM G. JACOBI
Chairman

JOHN A. DIMLING
President & Chief Operating Officer

Vice Chairman, IMS & President, IMS Int'l Region

SHUNSUKE KEIMATSU
President, IMS Japan
Chairman, Cognizant Japan
Chairman, SSJ K.K.

JAMES C. NEWELL
Senior Vice President, Global Services and
Global Client Services

</TABLE>


<PAGE>




                                 [LOGO TO COME]







TRANSFER AGENT
First Chicago Trust Company of New York
P.O. Box 2500
Jersey City, New Jersey 07303-2500
Telephone: (201) 324-1225

CORPORATE CENTER
200 Nyala Farms
Westport, Connecticut 06880
Telephone: (203) 222-4200

INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Canterbury Green
Stamford, Connecticut 06901

FORM 10-K
Your Company will file its report to shareholders on Form 10-K with the
Securities and Exchange Commission by March 31, 1997. Many of the SEC's 10-K
information requirements are satisfied by this 1996 report to shareholders.
However, a copy of the Form 10-K will be available without charge after March
31, 1997, upon request to the Investor Relations Department at the Corporate
Center address above.

COMMON STOCK INFORMATION
The Company's common stock (symbol CZT) is listed on the New York Stock
Exchange.