<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------
                                    FORM 10-K
                                        
               [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the Fiscal Year Ended December 31, 1996
                                       OR
             [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                                        
                         Commission File Number 0-12311
                                 ---------------
                        COMPUTER LANGUAGE RESEARCH, INC.
             (Exact name of Registrant as specified in its charter)

                    Texas                                 75-1297386
       (State or other jurisdiction of                 (I.R.S. Employer
        incorporation or organization)                Identification No.)
     2395 Midway Road, Carrollton, Texas                    75006
   (Address of principal executive offices)              (Zip Code)
                                        
                                 (972) 250-7000
              (Registrant's telephone number, including area code)
                                 ---------------
        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:  None
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                          Common Stock, $0.01 Par Value
                                (Title of class)
                                 ---------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.      Yes  X     No
                                            ---       ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  X
           ---
The aggregate market value of the voting stock held by non-affiliates of the
Registrant at February 28, 1997, was $48,658,736.  This number was derived using
beneficial ownership of affiliates.

On February 28, 1997, there were 14,274,061 shares outstanding of the
Registrant's Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                        
(a)  Selected portions of the Registrant's Definitive Proxy Statement for the
     Annual Meeting to be held May 1, 1997  --  Part III

(b)  Selected portions of the Registrant's Registration Statement on Form S-1,
     Registration No. 2-83286  --  Part IV

<PAGE>

                        COMPUTER LANGUAGE RESEARCH, INC.
                                        
                                    FORM 10-K
                                        
                   For the Fiscal Year Ended December 31, 1996


                                        
                                TABLE OF CONTENTS
                                        
                                        
                                        
 ITEM                                                                   PAGE
 ----                                                                   ----

                                     PART I.
  1     Business ...................................................      1
  2     Properties .................................................      8
  3     Legal Proceedings ..........................................      9
  4     Submission of Matters to a Vote of Security Holders ........      9


                                    PART II.
                                        
  5     Market for Registrant's Common Equity and
         Related Stockholder Matters ...............................      9
  6     Selected Financial Data ....................................     10
  7     Management's Discussion and Analysis of Financial
         Condition and Results of Operations .......................     12
  8     Financial Statements and Supplementary Data ................     22
  9     Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure .......................     40


                                    PART III.
                                        
 10     Directors and Executive Officers of the Registrant .........     40
 11     Executive Compensation .....................................     42
 12     Security Ownership of Certain Beneficial Owners
         and Management ............................................     43
 13     Certain Relationships and Related Transactions .............     43


                                    PART IV.
                                        
 14     Exhibits, Financial Statement Schedules,
         and Reports on Form 8-K ...................................     43
 14(a)  Index to Financial Statements and Financial Statement
         Schedules .................................................     46
        Financial Statement Schedule II -- Valuation and
         Qualifying Accounts .......................................     47
        Signatures .................................................     48





                                        i
<PAGE>
                                     PART I


ITEM 1.   BUSINESS

(a)       GENERAL DEVELOPMENT OF BUSINESS

The company was founded in 1964 and incorporated in Texas in February 1969 as
Computer Language Research, Inc. (CLR), known together with all subsidiaries as
the "Company."  Headquartered in Carrollton, Texas (a suburb of Dallas, Texas),
the Company also maintains sales and support facilities throughout the United
States.  In May 1983, the Company made its initial public offering of common
stock which trades on the Nasdaq National Market under the symbol:  CLRI.  Based
upon the products and services provided today, the Company's Standard Industrial
Classification is 7372 - Prepackaged Software.

In its beginning, the Company's primary business was processing federal
individual income tax returns for tax preparers as a computer service bureau.
Since that time, the Company has expanded its product offerings to include
almost every type of tax return available.  The Company has also been on the
leading edge of technological advances in the computer industry providing five
generations of computer automation technology.  See also (c) Products and
Services below.

In 1994, the Company undertook a new strategy:  to provide software and services
that generate recurring revenue in vertical market segments, leveraging the
Company's technological, marketing, and sales expertise.  This strategy has led
the Company into new and specialized markets with the Company making significant
progress toward its goals through acquisitions completed during the period from
December 1994 through October 1996.

In December 1994, the Company completed an acquisition from Prentice-Hall
Professional Software, Inc. (PHPS) and acquired audit and practice management
software for accounting firms and property management software for the
multifamily housing industry.  Then in April 1995, the Company expanded the
professional audit software through the acquisition of the ACE (Automated Client
Engagement)(R) software line from Sequel/McGladrey Software.  In January 1996,
the Company acquired additional practice management and write-up software from
E.F. Haskell & Associates, Inc.  Since the acquisitions, the Company has
integrated, expanded, and upgraded the line and in April 1996, launched a suite
of fully-integrated, easy-to-use Windows(R) software (see also (e) Product
Development, below).  The software is marketed through the unincorporated ACE
division of the Company and its financial results are included in the Fast-Tax
business.

In June 1995, the Company expanded on the property management software that it
acquired from PHPS with the acquisition of the property management software from
the Dallas-based company, Rent Roll, Inc.  In December 1995, CLR incorporated
its own wholly-owned subsidiary, Rent Roll, Inc. (Rent Roll).  Then in 1996,
Rent Roll completed seven strategic acquisitions (see list below) which have
added product functionality and increased market share.  Rent Roll is now an
industry leading provider of multifamily property management software, able to
offer the most complete line of property management tools available.





                                        1
<PAGE>
In December 1995, the Company expanded its tax business through the acquisition
of the tax compliance software business (formerly known as TMS) of the Tax
Technology Group of Price Waterhouse LLP.  The Company is in the process of
integrating the products to develop a "best-of-the-best" combination of features
found in TMS and in its own Windows-based tax product, InSource(R).  See also
(e) Product Development, below.

Over the past few years, the Company has evolved into a business application
software company expanding well beyond providing the original tax automation
systems upon which the Company was founded.

1996 Acquisitions:  (For additional details see Item 8 - Note 3 in the Notes to
Consolidated Financial Statements)

January    - practice management and write-up software for the accounting
              industry, from E.F. Haskell & Associates, Inc.
January    - applicant screening and other information services, and the capital
              stock of Credit Interfaces, Inc.
January    - affordable housing property management software, from Project Data
              Systems, Inc.
March      - fixed asset management software for corporations, from Axtell
              Development Corporation
March      - applicant screening and other information services, from Renter
              Index, Inc.
March      - bar code scanning and information processing technology, from
              Crystal Solutions, LLC
August     - affordable housing property management software, from A&M Software,
              Inc.
September  - eviction database service, from Automated Research Technology Inc.
October    - rural housing software, from Castle Lake Software, Inc.

(b)   FUNCTIONAL BUSINESS GROUPS

FAST-TAX BUSINESS
-----------------
The Company, through its unincorporated ACE division, offers accounting software
to public accounting firms throughout the United States which range in size from
the large regional and national firms to sole practitioners.

The Company offers its tax products and services to four primary groups of
clients, ranked in order of relative revenue concentration:  Accounting,
Corporate, Bank, and Government.

ACCOUNTING:  Public accounting firms in the United States and abroad comprise
this group.  These firms have complex tax processing needs and range in size
from the largest multinational accounting firms to sole practitioners.

CORPORATE:  Clients consist of corporations that process complex, consolidated
federal tax returns and a variety of state and local tax returns.  The
corporations range in size from the Fortune 500 multinational corporations to
small corporations with small internal tax departments.  In addition, the
Company has two sub-groups which market specialized software products that fit
the unique requirements of insurance and utility companies.  The Company also
provides automated tax processing services to partnerships, primarily large
syndications and master limited partnerships.



                                        2
<PAGE>
BANK:  Large- and medium-sized banks and trust companies that offer trust
services use the Company's tax return processing products and services to
process both federal (1041) and state fiduciary income tax returns, 1099s, and
other beneficiary information.

GOVERNMENT:  The Company's wholly-owned subsidiary, Electronic Tax Systems,
Inc., provides an automated international tax audit and review system to the
U.S. Internal Revenue Service (IRS).  The system, called STAR (System for Tax
Audit and Review), is designed to assist IRS international examiners in
reviewing the international tax compliance activities of American corporations.

Rent Roll Business
------------------
Rent Roll provides multifamily property management software to a client group of
property management and owner/operator companies ranging in size from the
largest publicly and privately held in the industry to the smallest of companies
managing a single property.  The client group provides management for both
conventional and government-subsidized affordable housing properties.

(c)       PRODUCTS AND SERVICES

SOFTWARE AND SYSTEMS:  Since 1965, the Company has successively implemented five
generations of software technology:

First Generation:   Service Bureau Tax Processing
Second Generation:  On-Line Tax Processing
Third Generation:   Client Data Input and Print Tax Processing
Fourth Generation:  Client In-House, Microcomputer-based Tax Processing
Fifth Generation:   Microsoft(R) Windows-based Tax Automation Systems

The Company has evolved to become primarily a supplier of microcomputer-based
software and related services, although all five generations of technology are
still offered today.  The systems available today enable clients to use the
Company's software (tax, accounting, and property management) while performing
the tasks in their own offices.

The fifth generation of technology for automating tax-related activities for
accounting firms, corporate tax departments, and bank trust tax departments is
reflected in products such as GoSystem(R) for Windows, InSource(R), and
TrustEase(R), respectively.  It is also reflected in the ACE suite of accounting
software released this year and in the Windows-based property management
software that is currently being developed.  These products are intended to
improve the efficiency and productivity of the tasks performed and will continue
to evolve as the technology and needs of the clients do.  For example, the
Company is currently in the process of developing Windows client/server-based
versions of many of its tax products.

TAX PROCESSING OPERATIONS:  The Company's tax processing operations consist of
tax return production (including data entry), computing, printing, data
communications, and distribution.

ELECTRONIC FORMS MANAGEMENT:  ACE Forms (formerly known as E-Form), initially
introduced in 1992, is the first complete tax form service available on a single
CD-ROM disk.  ACE Forms was incorporated into the ACE suite of products which
were introduced in 1996.  ACE Forms includes more than 25,000 pages of tax-
related forms and instructions.  With ACE Forms, forms can be viewed and filled


                                        3
<PAGE>
in on-screen, and then printed either blank or completed.  ACE Forms is
available in both Microsoft Windows and DOS formats.  The Company also has a
contract to supply a private label electronic form product to a major supplier
of tax information.

PROPERTY MANAGEMENT SYSTEMS AND SERVICES:  The software systems currently
offered by Rent Roll are DOS-based with Windows-based products currently under
development.  In addition to the software provided by Rent Roll, they also
provide applicant screening services (background checks including eviction,
criminal history, and subsidy compliance) to multifamily property management
companies.

(d)       SALES AND MARKETING

Company-employed sales personnel located throughout the United States market the
Company's products and services.  The Company also markets its products through
advertising in trade publications, direct mail, trade shows, telemarketing, road
show campaigns, and public relations activities.  The Company has entered into a
number of joint marketing agreements whereby companies and partnerships have
agreed to market the Company's products and services to their clients and
customers.

Tax processing and ACE products for accounting firms are generally licensed to
individual offices rather than on a multiple-office basis; however, some
national and large local accounting firms traditionally enter into firm-wide
site-licenses for all of their offices.  Tax processing products for
corporations are generally licensed for use in corporate tax departments.

Property management software products are generally licensed to the property
owner or a fee management company who then installs them at the individual
property site.  However, some products are licensed to the corporate office on a
multiple-user basis when utilized for the evaluation of a portfolio or multiple
properties rather than a single site.

The Company maintains, at its headquarters, a support center to support the
Company's tax software and services with assistance and support for the tax
activities available through a toll free number and also available at Fast-Tax
locations throughout the country.  Support for the ACE accounting software is
available through a toll free number with staff located in our offices in
Atlanta, Ga., while support for the multifamily property management products is
available through toll free numbers on the East Coast (Atlanta, Ga. and
Burlington, Vt.), Centrally (Carrollton, Texas), and on the West Coast
(Petaluma, Calif.).  The real estate applicant screening center provides the
necessary support and services to clients and is located at the Company's
headquarters.

The Company's World Wide Web site is an important vehicle for communicating
product information to clients and prospective clients.  The site is located at
http://www.clr.com, and includes general company information as well as detailed
information about its products.

(e)       PRODUCT DEVELOPMENT

The software business requires a continuing high level of expenditures for the
development, maintenance, and updating of systems and services due to the rapid
technological changes and changes in accounting and government regulations


                                        4
<PAGE>
(federal, state, and local).  The Company also incurs substantial expenditures
to update, enhance, and maintain its existing systems and products by adding
features and functions.  Due to these changes, there is no assurance that the
Company's development efforts will always result in successful products.  Risks
exist in developing new products, adopting new technology, and converting new
products into profitable operations.

For details of the Company's expenditures related to product development, see
Item 7 - Management Discussion and Analysis of Financial Condition and Results
of Operations.

Among the new products and services developed and acquired by the Company during
the year were:

     InSource CS.  InSource CS, announced in 1995 and released in the fourth
quarter of 1996, is an advanced 32-bit Windows-based tax processing system
available today for corporate tax departments.  Designed to take full advantage
of the client/server platform, InSource CS offers greater levels of performance
and flexibility.  The server side of InSource CS operates on a Windows NT
server, while the client side operates on Windows 95 or Windows NT Workstation.
InSource CS currently offers client/server applications for Property Tax,
Domestic Income Tax, 1099 processing, and Fixed Asset Management.  Plans for
including other products in the CS family during 1997 include software for
Provisions, Insurance Income Tax, International Income Tax , and Utility Fixed
Asset Management.

     Corporate Domestic Income Tax Options.  As a result of the December 1995
acquisition of TMS software from Price Waterhouse LLP, a variety of options (all
part of the InSource family) are now available for processing of domestic income
tax returns.  InSource, the original file server-based Windows product, uses a
tax accounting methodology.  InSource TMS, also a file server-based Windows
product, is the successor to TMS for Windows and uses the workpaper-based
methodology pioneered in the Price Waterhouse system.  InSource Express remains
the system of choice for tax departments requiring a return-preparation-only
system without the more sophisticated features of InSource and InSource TMS.
InSource CS -- Domestic Income Tax, discussed above, will evolve during 1997 to
become the "best-of-the-best" product envisioned at the time of the TMS
acquisition.

     Utility Industry Group.  In 1996 the Company announced the formation of a
new specialized industry sub-group within the Corporate group of the tax
business.  This new group will develop and market software products designed to
meet the unique requirements of the utility industry.  This approach was highly
successful in developing income tax, premium tax, and 1099 compliance products
specifically designed for the insurance industry.  The utility company group
will begin by releasing InSource CS - Utility Fixed Asset Management Systems
(UFAMS) software in 1997.

     ACE.  In April 1996, the Company announced the formation of a new division
called Automated Client Engagement, or "ACE" to develop, market, and support a
fully-integrated, easy-to-use Windows-based accounting software product.  The
released product line incorporates software acquired from PHPS,
Sequel/McGladrey, and E.F. Haskell and includes applications for accounting,
client write-up, trial balance, time and billing, practice management, document
management, and electronic forms.  In 1997, all ACE applications will be
enhanced to provide a uniform interface and tighter integration which will
automate the flow of information between applications, including Fast-Tax

                                        5
<PAGE>

GoSystem software.  In addition, beginning in late 1997, ACE products will be
available over the Internet.

     Rent Roll.  Rent Roll is a comprehensive property management tool, which
successfully combines the administrative needs of a multifamily management
company with the requirements of accounts receivable reporting, and it puts
these functions out on the property site.  Rent Roll is also well known for its
user-definable security settings.  The Company released an enhanced version of
its leading DOS-based product in the third quarter of 1996 providing greater
functionality for invoice processing, budget management, purchase order control,
traffic measuring, and added over 35 new reports to the program.  The program
was also enhanced to address century clock calculations for date awareness
beyond the year 2000.

     Improvement of Screening Services.  The Company combined the databases of
information that were acquired with Credit Interfaces, Renter Index, and
Automated Research Technologies, and thereby has been able to improve the amount
and quality of information provided regarding eviction records, previous address
information, and criminal background investigations.

     InSite.  During 1997, the Company will begin releasing a product that is
currently under development.  InSite is a Windows-based integrated suite of
property management tools that will allow users to share and report information
in a way never before possible.  It will enable them to perform more functions
at property sites and use the information to manage their properties more
effectively.  In addition, direct links to the home office will make reporting
easy, fast and foolproof.

(f)       COPYRIGHTS, TRADEMARKS AND TRADE SECRETS

The Company believes that its software products and attendant intellectual
property rights related to the software products are proprietary in nature and
of substantial value.  Thus, it relies on protection of its computer programs
through use of copyright law, trademark law, common law trade secret law, trade
secret statutes, internal and external nondisclosure safeguards, as well as
restrictions on disclosure, reverse engineering, and transfer that are
incorporated into software license agreements.  Employees and outside
programmers and consultants are required to execute agreements protecting the
secrecy and ownership of the Company's intellectual property.

The Company, to date, has had no indication of any material infringement of any
of its intellectual property rights.  Notwithstanding this, enforcement of
intellectual property rights against infringement and unauthorized use is
difficult, and the Company can offer no assurances that such infringement or
unauthorized use has not occurred.  In the event of infringement or unauthorized
use, the Company will vigorously defend and enforce its intellectual property
rights.

The Company's tax compliance and tax practice management software products are
licensed under trademarks such as Fast-Tax(R), GoSystem(R), EasyGo(R), System
5(R), InSource(R), ACE (Automated Client Engagement)(R), SmartBridge(R),
TrustEase(R).  The Company's real estate software products are licensed under
trademarks such as Rent Roll(TM), OnSite(TM), MicroRENT(TM), MicroHUD(R),
HUDManager(R), and InSite(TM).  (Please note, this is not meant to be a complete
list of all Company trademarks.)


                                        6
<PAGE>

On May 10, 1996, the IRS served a summons on the Company in the matter of Caltex
Petroleum Corporation.  The summons sought production of the Company's computer
software programs (which had formerly been owned by Price Waterhouse LLP, "PW")
that had computed Caltex's foreign tax credit limitations for its federal income
tax returns for the calendar tax years ended December 31, 1987, 1988, 1989, and
1990.  The summons also requested a printed copy and a machine readable copy of
the source code for such computer software along with a long list of ancillary
materials.  The summons was based on the government's contention that the
summoned materials were taxpayer books, records and other data under Section
7602 of the Internal Revenue Code.  The Company did not concur in this theory
and declined to comply with the summons, while continuing to discuss the matter
with the Internal Revenue Service.  On September 27, 1996, the IRS initiated
United States of America v. Caltex Petroleum Corp., Price Waterhouse, LLP, and
Computer Language Research, Inc. (Civil Action No. 3:96-CV-2726-X, in the United
States District Court for the Northern District of Texas, Dallas Division) by
filing a Petition to Enforce Internal Revenue Service Summonses against Caltex,
PW and the Company.  On September 30, 1996, the IRS obtained, on an ex parte
basis, an Order to Show Cause showing why Caltex, PW and the Company should not
be compelled to comply with prior IRS summonses, including the summons served on
the Company.  The United States Magistrate to whom the case had been assigned
ordered mediation for February 13 and 14, 1997.  The mediation occurred and
produced an Agreed Partial Judgment and Protective Order Regarding Software
Access pursuant to which the Internal Revenue Service will have access to the
PW/Caltex software subject to certain restrictions on use, copying and
dissemination.  Whether an arrangement regarding the summoned source code can be
worked out prior to the Hearing of the matter was not known as of the date of
filing this document, nor is it possible to assess the likely outcome of the
Hearing on an issue of first impression in the federal or state courts.

(g)       SEASONALITY

This information is set forth in Item 7 - Management's Discussion and Analysis
of Financial Condition and Results of Operations.

(h)       WORKING CAPITAL

Working capital requirements of the Company are financed primarily from
operations.

(i)       CUSTOMERS

During the years ended December 31, 1996, 1995, and 1994, no single customer
accounted for 10% or more of the Company's consolidated revenues.  The Company
provides tax processing services, software, and support to each of the six
largest accounting firms in the United States.  While the loss of any one of
these customers would not have a material adverse consequence to the Company,
the loss of more than one of these customers could.

(j)       BACKLOG

Because the Company generally ships a major portion of its tax software products
prior to the beginning of "tax season" and performs a major portion of its
processing services during "tax season," backlog is not meaningful.  Backlog is
not a material factor for real estate software products as the supply and
shipping are able to keep pace with the demand.


                                        7
<PAGE>
(k)       GOVERNMENT CONTRACTS

No material portion of the Company's business is subject to renegotiation of
profits or termination of contracts or subcontracts at the election of the
government.

 (l)      COMPETITION

The Company cannot precisely determine its relative position in applicable
software markets as reliable information is not available as to the total number
of tax returns processed, installations of tax, accounting or multifamily
property management software, or total revenue derived from licensing such
software.  The Company's primary competitors are national, regional, and local
software publishers which license their tax and accounting software products to
individuals, professional firms, and large companies/corporations; and license
their property management software products to individual property owners,
institutions, corporations, real estate investment trusts, and professional
property management companies.  In addition, as producers of "low-end" products
seek to market more sophisticated products, they can become competitors of the
Company.

Some competitors are larger than the Company and have greater financial,
marketing, and personnel resources.  There are also a number of larger software
companies that may have the technological ability to develop products similar to
those offered by the Company.  Competition is on the basis of price, service,
support, reliability, product capability, technology, experience, and commitment
to automation.  The Company believes that it competes effectively in all of
these respects and that it is a leading supplier of:  (1) tax automation
software and related services to national public accounting firms, corporations,
and the banking industry, and (2) multifamily property management software and
related services to national, regional, and local entities which engage in the
ownership and/or management of multifamily properties.

(m)       RESEARCH AND DEVELOPMENT

This information is set forth in Note 2 in the Notes to Consolidated Financial
Statements in Item 8.

(n)       ENVIRONMENTAL CONTROL

Compliance with environmental regulations does not materially affect the
Company's capital expenditures, earnings, or competitive position.

(o)       EMPLOYEES

At December 31, 1996, the Company employed 1,095 regular full-time employees.
The Company also employs more than 100 temporary employees in operations and
customer service functions during its peak tax processing season.  None of the
Company's employees is represented by a union.  The Company considers the
relations with its employees to be good.








                                        8
<PAGE>
Item 2.   PROPERTIES

The Company owns approximately 41 acres of land in Carrollton, Texas, where its
corporate office is located.  The facility presently occupies approximately 27
acres and contains approximately 403,000 square feet, which provides for the
Company's current and foreseeable future usage requirements.

The Company also owns 19 acres of undeveloped land in Mesquite, Texas.

The Company leases office space in approximately 11 cities throughout the United
States, primarily for sales and service personnel.  The Company believes that
all its facilities are suitable for the types of activities performed.  The
leases run for various terms with the longest term expiring in 2000.


Item 3.   LEGAL PROCEEDINGS

None.


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

No matters were submitted to a vote of security holders during the fourth
quarter of 1996.



Note:  The information provided pursuant to Item 10 of this Report is deemed to
be also included in Part I hereof to the extent required by the rules and
regulations of the Securities and Exchange Commission.


                                     PART II

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

MARKET PRICES OF COMMON STOCK

The Company's common stock trades on the Nasdaq National Market under the symbol
CLRI.  The following stock prices reflect high and low sales prices for 1996 and
1995 as reported by The Nasdaq Stock Market.

--------------------------------------------------------------------
                                 1996                   1995
--------------------------------------------------------------------
                           High      Low           High      Low
--------------------------------------------------------------------
First quarter            $ 17 1/2  $ 13 1/4      $ 12      $  7 1/2
Second quarter             17        12            10 1/2     7 1/4
Third quarter              13         9 1/2        12 3/8     9 1/4
Fourth quarter             13         9 1/2        15        11 1/4
--------------------------------------------------------------------

There were 423 and 445 shareholders of record of common stock as of February 28,
1997, and February 23, 1996, respectively.



                                        9
<PAGE>
CASH DIVIDENDS

The Board of Directors of the Company, at its February 1997 meeting, declared a
dividend for the first quarter of 1997 at a rate of $0.10 per share.  Future
dividends may vary depending upon the Company's profit levels and capital
requirements as well as financial and other conditions existing at the time.

---------------------------------------------
                           1996        1995
---------------------------------------------
First quarter            $  0.10     $  0.10
Second quarter              0.10        0.10
Third quarter               0.10        0.10
Fourth quarter              0.10        0.10
---------------------------------------------



ITEM 6.   SELECTED FINANCIAL DATA

                       CONSOLIDATED FINANCIAL INFORMATION

                                          Years Ended December 31
-------------------------------------------------------------------------------
(In thousands, except
 per share amounts)             1996      1995      1994      1993      1992
-------------------------------------------------------------------------------
INCOME STATEMENT DATA:
Revenues                      $129,243  $110,703  $ 99,068  $ 98,852  $ 97,675
Costs and expenses:
 Cost of revenues               64,933    56,109    49,608    50,840    57,448
 Selling, general, and
  administrative                59,707    41,162    32,348    33,513    30,866
 Charge for purchased research
  and development                3,498     5,600        --        --        --
-------------------------------------------------------------------------------
   Total costs and expenses    128,138   102,871    81,956    84,353    88,314
-------------------------------------------------------------------------------
Operating income                 1,105     7,832    17,112    14,499     9,361
Interest income                    567     1,925     1,020       562       334
Interest expense                    93         8       330       736     1,159
Other, net                         (39)     (626)      315      (202)   (1,876)
-------------------------------------------------------------------------------
Income from continuing opera-
 tions before income taxes       1,540     9,123    18,117    14,123     6,660
Provision for income taxes         499     2,264     7,095     5,401     1,964
-------------------------------------------------------------------------------
Income from continuing
 operations                      1,041     6,859    11,022     8,722     4,696
Discontinued operations:
 Income (loss) from dis-
  continued operations,
  net of tax                        --        76       321      (176)      812
 Gain on disposal of dis-
  continued operations,
  net of tax                        --     4,720        --        --        --
-------------------------------------------------------------------------------

                                       10
<PAGE>
                 CONSOLIDATED FINANCIAL INFORMATION (Continued)

                                          Years Ended December 31
-------------------------------------------------------------------------------
(In thousands, except
 per share amounts)             1996      1995      1994      1993      1992
-------------------------------------------------------------------------------
Income before extraordinary
 item and cumulative effect
 of accounting change            1,041    11,655    11,343     8,546     5,508
Extraordinary gain, net of tax      --        --        --        --     1,084
Cumulative effect of
 accounting change                  --        --        --        --     5,694
-------------------------------------------------------------------------------
Net income                    $  1,041  $ 11,655  $ 11,343  $  8,546  $ 12,286
===============================================================================

Earnings per share from
 continuing operations        $   0.07  $   0.48  $   0.77  $   0.62  $   0.34
Earnings (loss) per share
 from discontinued
 operations                         --      0.33      0.02     (0.01)     0.06
-------------------------------------------------------------------------------
Earnings per share before
 extraordinary item and
 and cumulative effect
 of accounting change             0.07      0.81      0.79      0.61      0.40
-------------------------------------------------------------------------------
Earnings per share            $   0.07  $   0.81  $   0.79  $   0.61  $   0.89
===============================================================================

Dividends per share           $   0.40  $   0.40  $   0.36  $   0.28  $   0.16
-------------------------------------------------------------------------------
Weighted average number of
 common and common equiva-
 lent shares outstanding        14,564    14,434    14,280    14,066    13,796
-------------------------------------------------------------------------------

                                                 December 31
-------------------------------------------------------------------------------
(In thousands)                  1996      1995      1994      1993      1992
-------------------------------------------------------------------------------
BALANCE SHEET DATA:
Total assets                  $ 98,937  $ 99,060  $ 84,093  $ 79,686  $ 73,077
Long-term debt, including
 current portion              $    938  $  1,687  $     --  $  8,494  $  7,883
Shareholders' equity          $ 62,002  $ 65,549  $ 58,319  $ 51,467  $ 46,522
--------------------------------------------------------------------------------
                                        
    See Item 7 - Management's Discussion and Analysis and Item 8 - Financial
                       Statements and Supplementary Data.







                                       11
<PAGE>
ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS
-------------------------------------------------------------------------------
SELECTED RESULTS EXPRESSED AS A PERCENTAGE OF REVENUES
-------------------------------------------------------------------------------
                                                    Years Ended December 31
                                                  -----------------------------
                                                  1996        1995        1994
-------------------------------------------------------------------------------
Cost of revenues                                  50.2%       50.7%       50.1%
Selling, general, and administrative              46.2%       37.2%       32.6%
Charge for purchased research and development      2.7%        5.0%         --%
Total costs and expenses                          99.1%       92.9%       82.7%
Operating income                                   0.9%        7.1%       17.3%
Provision for income taxes                         0.4%        2.0%        7.2%
Income from continuing operations                  0.8%        6.2%       11.1%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
COMPANY ACTIVITIES
-------------------------------------------------------------------------------
In 1995 and 1996 the Company, together with its wholly-owned subsidiary, Rent
Roll, Inc., completed twelve acquisitions at a total cost of $39.6 million.
Eight of the acquisitions were made to enhance Rent Roll's business, with the
remainder made for the Fast-Tax business.  For additional details see Note 3 in
the Notes to Consolidated Financial Statements.

These acquisitions have a significant impact on the comparability of financial
results.  Effects of these acquisitions tend to adversely distort reported
performance and may span more than one year before more normalized operating
results become evident.  The more important of these effects are as follows:

  o  Charge for purchased research and development (R&D) costs.

  o  Amortization of purchase price related to the acquired business (see
     additional details below).

  o  Deferral of revenue.  This is particularly acute where a significant
     component of revenues from an acquired business is reported ratably (e.g.,
     annual maintenance contracts).  It generally takes a full year following an
     acquisition for there to be a full year of revenue to offset a full year of
     operating expenses.

  o  Lost revenue and additional expense incurred during the period in which the
     new business is being assimilated.

  o  Increased product development costs of maintaining and integrating the
     acquired products.

-------------------------------------------------------------------------------
1996 COMPARED WITH 1995
-------------------------------------------------------------------------------
RESULTS OF OPERATING INCOME

Operating income for the Fast-Tax business was $17.6 million compared with
operating income of $13.5 million in 1995.  The operating loss for the Rent Roll
business was $11.7 million compared with an operating loss of $0.6 million in
1995.

                                       12
<PAGE>
The changes in operating income are partially attributable to the changes in
acquisition charges, including the charge for purchased R&D, with the Fast-Tax
charges decreasing $5.6 million and Rent Roll increasing $7.5 million (see
additional details below).  Additionally, the Company is experiencing a
significant increase in operating expenses related to the newly acquired
businesses without the benefit of comparable offsetting revenues. Current year
revenues are higher than 1995, due to acquisitions, but the growth has occurred
at a lower rate than the increase in operating costs and expenses related to
acquired companies.  These expenses include a higher level of expenditures
necessary to achieve a smooth assimilation of the acquisitions which have been
completed in 1995 and 1996.

The Company currently anticipates that revenue will increase in excess of 10% in
1997 and that operating margins will trend toward more historical levels (see
Safe Harbor Statement below).

Business Results (in millions):
-------------------------------

                          Fast-Tax              Rent Roll         Corporate
                   ---------------------  ---------------------  ------------
                    1996    1995    Chg    1996   1995    Chg    1996   1995
                   ------  ------  -----  ------  -----  ------  -----  -----
Revenues           $113.2  $107.1  $ 6.1  $ 16.0  $ 3.6  $ 12.4  $  --  $  --
                   ------  ------  -----  ------  -----  ------  -----  -----
Operations           90.9    83.3    7.6    19.3    3.3    16.0    4.8    5.1
Acquisition
 related              4.7    10.3   (5.6)    8.4    0.9     7.5     --     --
                   ------  ------  -----  ------  -----  ------  -----  -----
Total operating
 expenses            95.6    93.6    2.0    27.7    4.2    23.5    4.8    5.1
                   ------  ------  -----  ------  -----  ------  -----  -----
Operating income
 (loss)            $ 17.6  $ 13.5  $ 4.1  $(11.7) $(0.6) $(11.1) $(4.8) $(5.1)
                   ======  ======  ====== ======  =====  ======  =====  =====

                           Total
                   ---------------------
                    1996    1995    Chg
                   ------  ------  -----
Revenues           $129.2  $110.7  $18.5
                   ------  ------  -----
Operations          115.0    91.7   23.3
Acquisition
 related             13.1    11.2    1.9
                   ------  ------  -----
Total operating
 expenses           128.1   102.9   25.2
                   ------  ------  -----
Operating income
 (loss)            $  1.1  $  7.8  $(6.7)
                   ======  ======  =====






                                       13
<PAGE>
Fast-Tax Business
-----------------
The increase in profit for the year is primarily due to the acquisition of the
tax compliance software business acquired from Price Waterhouse LLP in December
1995 (TMS acquisition).  Revenue related to TMS increased by $8.6 million with
operating expenses, including acquisition and consulting agreement charges,
increasing $5.3 million.  The acquisition charges related to TMS decreased $5.8
million mostly due to the 1995 charge for purchased R&D of $5.6 million.

The increase in operating income is also due in part to an increase in profit
from both the bank and accounting tax businesses totaling approximately $1.5
million.  The bank business revenue increased due to new contracts and continued
product success and the accounting tax business was able to decrease operating
expenses.

Increased product development costs noted in the following table are
attributable to Windows client/server and remote/server development and expenses
incurred to maintain and integrate products acquired through the TMS
acquisition.

       Product Development
       (in millions)
       -------------------                1996    1995    Chg
                                         ------  ------  ------
       Costs                             $ 32.2  $ 28.5  $  3.7
       Portion capitalized                 (7.1)   (7.1)     --
       Amortization                         3.7     3.1     0.6
                                         ------  ------  ------
       Net expense                       $ 28.8  $ 24.5  $  4.3
                                         ======  ======  ======


Rent Roll Business
------------------
Increased revenue of $12.4 million was primarily attributable to the
acquisitions discussed above under Company Activities and in Note 3 of the
Notes to Consolidated Financial Statements.

Increased operating expenses of $23.5 million is partially due to the $7.5
million increase in amortization of capitalized acquisition costs and the
charge for purchased R&D (see Note 3 in the Notes to Consolidated Financial
Statements).  The remaining increase is attributable to the increase in
operating expenses related to acquired companies, the integration of these
acquisitions, and product development.

Total software development costs were $2.5 million compared with $1.0 million
for 1995.  The Company is currently expensing all software development costs
incurred by Rent Roll since this business is newer and technological feasibility
is less certain than development undertaken in the more mature tax business.
Increased development costs are attributable to Windows client/server and
Internet development and expenses incurred to maintain and integrate products
marketed by acquired companies.






                                       14
<PAGE>
ACQUISITION RELATED AMORTIZATION AND CHARGES

The Company has made numerous acquisitions since 1991, and the portion of the
purchase prices that was allocated to intangibles has an average amortization
life of 4.9 years.  As discussed above, these acquisitions have a significant
impact on the comparability of financial results.  Amortization of intangibles
(including software) and other acquisition related charges for the years 1995
through 2000 and thereafter (based on existing acquisitions), are as follows
(in millions):

                       Amortization               R&D Write-off
                  ----------------------     ----------------------
    Year          Fast-Tax     Rent Roll     Fast-Tax     Rent Roll     Total
   ------         --------     ---------     --------     ---------     ------
    1995          $    4.7     $     0.9     $    5.6     $      --     $ 11.2
    1996               4.7           4.9           --           3.5       13.1
    1997               4.5           3.7           --            --        8.2
    1998               4.1           3.0           --            --        7.1
    1999               3.7           2.5           --            --        6.2
    2000               2.3           1.8           --            --        4.1
 Thereafter            0.3           0.7           --            --        1.0
                  --------     ---------     --------     ---------     ------
   Total          $   24.3     $    17.5     $    5.6     $     3.5     $ 50.9
                  ========     =========     ========     =========     ======

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

The net impact on the Company of all of the above was to decrease income from
continuing operations before income taxes.  Following are the primary items
accounting for this decrease (in millions):

  (i)  Increase in acquisition related amortization and
        other charges .............................................    $  1.9
 (ii)  Increase in operating losses related to newly acquired
        businesses (before acquisition charges)
        - Rent Roll ...............................................       3.6
        - TMS .....................................................       0.6
(iii)  Accrual related to TMS consulting services contract ........       1.9
 (iv)  Increased profit from the bank and accounting tax
        businesses ................................................      (1.5)
  (v)  Decrease in interest income due to lower levels of
        cash equivalents ..........................................       1.4
 (vi)  Decrease in expense due to less property and equipment
        sales/write-offs ..........................................      (0.6)
                                                                       ------
       Total of above .............................................    $  7.3
                                                                       ======
       Total decrease in income from continuing operations
        before income taxes .......................................    $  7.6
                                                                       ======

PROVISION FOR TAXES

The income tax provision for 1996 was $0.5 million compared to $2.3 million in
1995.  For an analysis of income taxes, see Note 9 in the Notes to Consolidated
Financial Statements.


                                       15
<PAGE>
DISCONTINUED OPERATIONS

On June 23, 1995, the Company sold substantially all of the assets of its
wholly-owned subsidiary, Electronic Form Systems Incorporated (EFS), reported
previously as the electronic form systems business segment.  For additional
information, see Note 11 in the Notes to Consolidated Financial Statements.

-------------------------------------------------------------------------------
1995 COMPARED WITH 1994
-------------------------------------------------------------------------------
Revenues increased $11.6 million or 12% to $110.7 million in 1995 from $99.1
million in 1994.  Acquisitions, which are discussed below, accounted for
approximately 80% of the increase accompanied by an 8% increase in bank market
revenues due to continued product success.  The increases were offset by a
decrease in revenue from: (i) national accounting firms due to competitive
pressures and continued price erosion, and (ii) the government business, because
the renewal options of a contract awarded in 1994, affected revenues to a lesser
extent in the current year.

Cost of revenues were $56.1 million or 50.7% of revenues in 1995 compared to
$49.6 million or 50.1% of revenues in 1994.  The increase is primarily
attributable to acquisitions made in 1995, along with increases in net product
development (see below).  The increases were offset by a decrease in maintenance
expense from outsourcing the maintenance service, as previously discussed in the
1995 first quarter Form 10-Q.

Total product development expenditures increased by $6.9 million to $29.5
million in 1995 from $22.6 million in 1994.  Approximately 40% of the increase
was capitalized, with the net expense increasing by $4.1 million.  The increase
is due to the Company's commitment to increase its product development related
to InSource and the conversion of certain tax applications to a Microsoft
Windows client/server platform.

Selling, general and administrative expenses were $41.2 million or 37.2% of
revenues in 1995 compared to $32.3 million or 32.6% of revenues in 1994.  As
with cost of revenues, the increase is primarily attributable to acquisitions
made in 1995, along with a comparative increase in administrative expenses as a
result of the allocation of certain administrative expenses to the EFS business
segment in 1994.

Acquisitions accounted for 95% of the increase in cost of revenues and selling,
general, and administrative expenses from 1994 to 1995.

In December 1995, the Company expensed a $5.6 million charge for purchased R&D
identified from the TMS acquisition.  It was determined that the R&D had not
reached technological feasibility and had no alternative future use; therefore,
it was charged to operations at the time of acquisition.

The TMS business acquired in the fourth quarter of 1995 reduced operating
profits by a total of $10.7 million, of which $5.1 million is a result of the
deferral of TMS revenue into 1996 pursuant to the Company's revenue recognition
practices, and the accrual of certain fees associated with the acquisition.  The
remaining $5.6 million is related to the charge for purchased R&D described
above.




                                       16
<PAGE>
Operating profits decreased by $9.3 million to $7.8 million in 1995 from $17.1
million in 1994.  The decrease is primarily due to the $10.7 million of losses
and charges from the TMS business as described above. To a lesser extent, the
decrease was affected by the inability to allocate administrative expenses to
the EFS segment, decreased profit from a government contract, and from
corporations.  These decreases were offset by increased profits from banks and
regional accounting firms and profits from other acquisitions made in 1994 and
1995.

Interest income increased from 1994 primarily due to higher balances of cash
equivalents and short-term investments.  Interest expense declined due to the
reduced average debt level.

The income tax provision for 1995 was $2.3 million compared to $7.1 million in
1994.  For an analysis of income taxes, see Note 9 in the Notes to Consolidated
Financial Statements.

The Company's operating results from discontinued operations, net of income tax
effect, was income of $76,000 for 1995, as compared to $321,000 for 1994.  A
portion of the operating expenses allocated to this business segment in the past
continue to be reported by the Company.  A gain of $4.7 million, net of income
taxes, on the sale of EFS was recorded during the second quarter of 1995.  For
additional information, see Note 11 in the Notes to Consolidated Financial
Statements.

-------------------------------------------------------------------------------
OTHER INFORMATION
-------------------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES

Cash flow for 1996 saw a net decrease in cash and cash equivalents of $10.7
million, compared with a net increase of $7.4 million for 1995.  The decrease is
primarily due to (in millions):

  (i)  the 1995 conversion of short-term investments to cash .....    $ 16.8
 (ii)  the 1995 net proceeds from sale of the EFS subsidiary .....       3.5
(iii)  a decrease in cash paid for acquisitions ..................      (3.4)
 (iv)  the change in cash provided by operating activities,
        which is due to acquisition related activity and
        other working capital changes in the ordinary
        course of business .......................................       2.1
  (v)  an increase in capital expenditures and software ..........       0.7
 (vi)  the Company's draw on the line of credit netted
        with payments on long-term debt ..........................      (1.8)
                                                                      ------
       Total of above ............................................    $ 17.9
                                                                      ======
       Total variance ............................................    $ 18.1
                                                                      ======

The Company made investments in property and equipment of $6.4 million during
1996 compared to $5.4 million during 1995 and $4.2 million in 1994.  At December
31, 1996, the Company had no material capital commitments and it is anticipated
that investments in property and equipment will be approximately $6.5 million in
1997.



                                       17
<PAGE>
During 1996 the Company capitalized $7.1 million of software development costs
compared to $7.1 million in 1995 and $4.2 million in 1994.  The Company expects
capitalized software development costs to decrease slightly in 1997.  The
capitalization is due to the conversion and integration of acquired software
products along with the ongoing Windows client/server and Internet development.

On December 21, 1995, the Company entered into a $20.0 million revolving
credit/term facility which will expire in December 1997 and may be extended at
the lender's option.  At December 31, 1996, the Company had a $2.0 million note
payable outstanding against the credit/term facility, which was repaid by
February 10, 1997.

At its February 27, 1997, meeting, the Board of Directors declared a dividend
for the first quarter of 1997 at a rate of $0.10 per share totaling $1.4
million.  The dividend is payable March 28, 1997, to shareholders of record on
March 13, 1997.

The funds generated from operations together with the availability of the line
of credit, are expected to be sufficient for liquidity requirements and capital
needs of the Company.

SEASONALITY

The Company's revenues from tax products and services are seasonal, with a
larger percentage realized in the first and fourth quarters, as shown in the
table at the end of this section.  This seasonality is attributable to the
nature of the tax business, since the primary tax filing dates are in the first
half of the year, and clients are preparing for the upcoming tax season in the
fourth quarter.  Though the Company has continued to transition its clients to
site-license agreements under which revenue is recognized evenly over the annual
contract period, there continues to be some seasonal variation.

The Company's revenues from real estate software are not materially affected by
seasonality.

INFLATION

Certain costs incurred by the Company, such as labor and financing costs, are
significantly affected by inflationary factors.  Historically, the Company has
been able to offset inflationary cost increases through production efficiencies
and technological advances.

SAFE HARBOR STATEMENT

Statements in the Company's Securities and Exchange Commission filings which are
not historical facts are forward looking statements that are subject to risks
and uncertainties which may cause actual future results or events to vary
materially from such forward looking statements.  Such risks and uncertainties,
include, but are not limited to, the following:

  o  the ability and willingness of licensees of the Company's products to
     substitute other products for the products of the Company;

  o  a change in the perceived absolute overall value or comparative relative
     value (including features, quality and pricing) of the Company's products
     by current and/or potential licensees;


                                       18
<PAGE>
  o  the acquisition of electronic tax compliance products by huge,
     multinational conglomerates such as The Thomson Corporation (SCS Compute)
     and Wolters Kluwer NV (CCH Incorporated) and the continued publication of
     electronic tax compliance products by massive international accounting
     firms;

  o  the pricing and technology strategies of these and other competitors;

  o  changes in generally accepted accounting principals and practices;

  o  difficulties in obtaining and recognizing revenue from clients added
     through acquisitions;

  o  changes in tax rates applicable to the Company;

  o  changes in the Internal Revenue Code and various state tax laws and
     practices which reduce the complexity of the tax return preparation
     process, including, without limitation, the risk that one of various "flat
     tax" proposals will be enacted, could have a negative effect on demand for
     electronic tax compliance products such as those produced by the Company;

  o  difficulties in obtaining labor, equipment, supplies, power, and natural
     resources needed to produce and distribute the Company's products;

  o  general difficulties, delays, and cost overruns associated with the design,
     development, testing, and distribution of the Company's new and existing
     products and changes in platform, including, but not limited to, a failure
     to complete, test, and ship new products when anticipated;

  o  the Company's strategic decision to undertake a higher than historical
     number of acquisitions and the related risks and uncertainties associated
     with merging business cultures, merging technologies, retaining key
     employees and consultants, retaining licensees, controlling expenses
     associated with integrating previously separate businesses, and discovery
     of unanticipated obligations and liabilities;

  o  the Company's ability to identify attractive acquisition targets, to
     negotiate mutually acceptable terms, conditions and purchase prices, and to
     obtain the funds necessary to effectuate a transaction;

  o  the costs and other potential effects associated with legal and
     administrative proceedings and cases brought by or against the Company; and

  o  developments or assertions by or against the Company relating to
     intellectual property rights and intellectual property licenses, including,
     but not limited to, the ability of the Company to obtain appropriate
     software patents and the need for the Company to obtain software patent
     licenses in order to produce its products.










                                       19
<PAGE>
-------------------------------------------------------------------------------
SELECTED CONSOLIDATED QUARTERLY INFORMATION (UNAUDITED)
-------------------------------------------------------------------------------
                                                 1996 (A)
-------------------------------------------------------------------------------
                             First     Second     Third     Fourth
(In thousands, except       Quarter    Quarter   Quarter    Quarter     Total
 per share amounts)                                           (B)
-------------------------------------------------------------------------------
Revenues                    $35,847    $26,886   $27,434    $39,076   $129,243
Percent of 1996 total
 revenues                        28%        21%       21%        30%       100%
Operating income (loss)       1,067     (1,985)   (1,689)     3,712      1,105
Net income (loss)               773     (1,185)   (1,019)     2,472      1,041
Earnings (loss) per share   $  0.05    $ (0.08)  $ (0.07)   $  0.17   $   0.07
-------------------------------------------------------------------------------

                                                 1995
-------------------------------------------------------------------------------
                             First     Second     Third     Fourth
(In thousands, except       Quarter    Quarter   Quarter    Quarter     Total
 per share amounts)           (C)      (C) (D)                (E)
-------------------------------------------------------------------------------
Revenues                    $32,233    $21,123   $22,441    $34,906   $110,703
Percent of 1995 total
 revenues                        29%        19%       20%        32%       100%
Operating income (loss)       8,849        777     1,117     (2,911)     7,832
Discontinued operations          91      4,705        --         --      4,796
Net income (loss)             6,276      5,489     1,098     (1,208)    11,655
Earnings (loss) per share   $  0.44    $  0.38   $  0.08    $ (0.09)  $   0.81
-------------------------------------------------------------------------------
SEE DISCUSSION AT SEASONALITY ABOVE.

(A)  During the first quarter of 1996, the Company completed six acquisitions,
     and completed three more during the rest of 1996.  The results of
     operations related to these acquisitions is included in the Company's
     Consolidated Financial Statements beginning at their respective acquisition
     dates.  Acquisition related expenses for all acquisitions (including (D)
     and (E) below) was $13.1 million for 1996, which includes a $3.5 million
     charge for purchased R&D in the first quarter.  For additional details
     regarding acquisition activity see Note 3 in the Notes to Consolidated
     Financial Statements.

(B)  In the fourth quarter of 1996, the Company accrued $1.9 million reflecting
     its decision to exercise its option to terminate certain consulting
     services pursuant to the TMS consulting agreement.  See Note 8 in the Notes
     to Consolidated Financial Statements.

(C)  During the second quarter of 1995, the Company sold substantially all of
     the assets of a wholly-owned subsidiary (Electronic Form Systems
     Incorporated).  The operating results of the subsidiary have been treated
     as discontinued operations, and previously issued financial statements have
     been restated to conform to this presentation.  Included in second quarter
     discontinued operations is a gain of $4.7 million, net of taxes.  See Note
     11 in the Notes to Consolidated Financial Statements.



                                       20
<PAGE>
(D)  During the second quarter of 1995, the Company made two acquisitions
     (Sequel/McGladrey and Rent Roll, Inc.) totaling $6.8 million.  The results
     of their operations have been included in the Company's Consolidated
     Financial Statements beginning at their respective acquisition dates.  See
     Note 3 in the Notes to Consolidated Financial Statements.

(E)  During the fourth quarter of 1995, the Company acquired substantially all
     of the assets of the corporate tax compliance software business of Price
     Waterhouse LLP, and accordingly, the results of its operations have been
     included in the Company's Consolidated Financial Statements beginning in
     November 1995.  The 1995 total operating losses and other acquisition
     related charges incurred in connection with this acquisition were $10.7
     million which includes a $5.6 million charge for purchased R&D.  See Note 3
     in the Notes to Consolidated Financial Statements.












































                                       21
<PAGE>
ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                        COMPUTER LANGUAGE RESEARCH, INC.

                           CONSOLIDATED BALANCE SHEETS
                                        
                                     ASSETS
                                                              December 31
-------------------------------------------------------------------------------
(In thousands)                                              1996        1995
-------------------------------------------------------------------------------
CURRENT ASSETS:
 Cash and cash equivalents                                $  2,928    $ 13,641
 Accounts receivable, less allowance for doubtful
  accounts of $800 and $608 at December 31, 1996,
  and 1995, respectively                                    27,104      26,615
 Current deferred taxes                                      2,421       2,093
 Other current assets                                        2,621       1,584
-------------------------------------------------------------------------------
   Total current assets                                     35,074      43,933
-------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT, AT COST:
 Land                                                        2,584       2,584
 Buildings and improvements                                 16,866      16,787
 Data processing equipment                                  33,933      32,010
 Furniture, fixtures, and equipment                          9,086       8,608
-------------------------------------------------------------------------------
                                                            62,469      59,989
 Less accumulated depreciation                              41,581      39,527
-------------------------------------------------------------------------------
   Net property and equipment                               20,888      20,462
-------------------------------------------------------------------------------
OTHER NONCURRENT ASSETS:
 Software, net of accumulated amortization of
  $28,694 and $21,874 at December 31, 1996,
  and 1995, respectively                                    23,868      20,087
 Intangibles and other assets, net of accumulated
  amortization of $8,952 and $5,219 at December 31,
  1996, and 1995, respectively                              19,107      14,578
-------------------------------------------------------------------------------
   Total other noncurrent assets                            42,975      34,665
-------------------------------------------------------------------------------
Total assets                                              $ 98,937    $ 99,060
===============================================================================

          See accompanying Notes to Consolidated Financial Statements.












                                       22
<PAGE>
                        COMPUTER LANGUAGE RESEARCH, INC.

                           CONSOLIDATED BALANCE SHEETS
                                        
                      LIABILITIES AND SHAREHOLDERS' EQUITY
                                                              December 31
-------------------------------------------------------------------------------
(In thousands, except per share amounts)                    1996        1995
-------------------------------------------------------------------------------
CURRENT LIABILITIES:
 Notes payable                                            $  2,000    $     --
 Accounts payable                                            3,124       1,549
 Accrued compensation, payroll taxes, and benefits           7,950       8,634
 Deferred revenue                                            9,619      10,296
 Accrued support                                             1,264       2,133
 Other current liabilities                                   5,634       4,737
 Current portion of long-term debt                             750         750
-------------------------------------------------------------------------------
   Total current liabilities                                30,341      28,099
-------------------------------------------------------------------------------
NONCURRENT LIABILITIES:
 Long-term debt                                                188         937
 Other liabilities                                           5,700       3,270
 Deferred income taxes                                         706       1,205
-------------------------------------------------------------------------------
   Total noncurrent liabilities                              6,594       5,412
-------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES                                   --          --
-------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY:
 Preferred stock, $1 per share par value, 10,000
  shares authorized; none outstanding                           --          --
 Common stock, $0.01 per share par value, 40,000
  shares authorized; 15,084 shares issued and
  14,942 shares issued at December 31, 1996,
  and 1995, respectively                                       150         149
 Capital in excess of par value                             34,378      33,271
 Retained earnings                                          32,744      37,395
 Treasury stock at cost, 810 shares at
  December 31, 1996, and 1995                               (5,270)     (5,266)
-------------------------------------------------------------------------------
   Total shareholders' equity                               62,002      65,549
-------------------------------------------------------------------------------
Total liabilities and shareholders' equity                $ 98,937    $ 99,060
===============================================================================

          See accompanying Notes to Consolidated Financial Statements.











                                       23
<PAGE>
                        COMPUTER LANGUAGE RESEARCH, INC.

                        CONSOLIDATED STATEMENTS OF INCOME

                                                  Years Ended December 31
-------------------------------------------------------------------------------
(In thousands, except per share amounts)        1996        1995        1994
-------------------------------------------------------------------------------
Revenues                                      $129,243    $110,703    $ 99,068

Costs and expenses:
 Cost of revenues                               64,933      56,109      49,608
 Selling, general, and administrative           59,707      41,162      32,348
 Charge for purchased research and
  development                                    3,498       5,600          --
-------------------------------------------------------------------------------
   Total costs and expenses                    128,138     102,871      81,956
-------------------------------------------------------------------------------
Operating income                                 1,105       7,832      17,112
Interest income                                    567       1,925       1,020
Interest expense                                    93           8         330
Other, net                                         (39)       (626)        315
-------------------------------------------------------------------------------
Income from continuing operations
 before income taxes                             1,540       9,123      18,117
Provision for income taxes                         499       2,264       7,095
-------------------------------------------------------------------------------
Income from continuing operations                1,041       6,859      11,022
Discontinued operations:
 Income from discontinued operations,
  net of tax                                        --          76         321
 Gain on disposal of discontinued
  operations, net of tax                            --       4,720          --
-------------------------------------------------------------------------------
Net income                                    $  1,041    $ 11,655    $ 11,343
===============================================================================

Earnings per share from continuing
 operations                                   $   0.07    $   0.48    $   0.77
Earnings per share from discontinued
 operations                                         --        0.33        0.02
-------------------------------------------------------------------------------
Earnings per share                            $   0.07    $   0.81    $   0.79
===============================================================================

Weighted average number of common and
 common equivalent shares outstanding           14,564      14,434      14,280
-------------------------------------------------------------------------------

          See accompanying Notes to Consolidated Financial Statements.








                                       24
<PAGE>
                        COMPUTER LANGUAGE RESEARCH, INC.

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                        Years Ended 1996, 1995, and 1994
-------------------------------------------------------------------------------
                        Common Stock
                        ------------
                                        Capital in
(In thousands, except  Number of  Par   Excess of   Retained   Treasury
 per share amounts)     Shares   Value  Par Value   Earnings    Stock    Total
-------------------------------------------------------------------------------
Balance at
 December 31, 1993      14,655   $147   $ 31,559    $ 25,016   $(5,255) $51,467
  Net income                --     --         --      11,343        --   11,343
  Dividends ($0.36
   per share)               --     --         --      (5,007)       --   (5,007)
  Shares exercised under
   stock options           101     --        527          --       (11)     516
-------------------------------------------------------------------------------
Balance at
 December 31, 1994      14,756    147     32,086      31,352    (5,266)  58,319
  Net income                --     --         --      11,655        --   11,655
  Dividends ($0.40
   per share)               --     --         --      (5,612)       --   (5,612)
  Shares exercised under
   stock options           186      2      1,185          --        --    1,187
-------------------------------------------------------------------------------
Balance at
 December 31, 1995      14,942    149     33,271      37,395    (5,266)  65,549
  Net income                --     --         --       1,041        --    1,041
  Dividends ($0.40
   per share)               --     --         --      (5,692)       --   (5,692)
  Shares exercised under
   stock options           142      1      1,107          --        (4)   1,104
-------------------------------------------------------------------------------
Balance at
 December 31, 1996      15,084   $150   $ 34,378    $ 32,744   $(5,270) $62,002
===============================================================================

          See accompanying Notes to Consolidated Financial Statements.

















                                       25
<PAGE>
                        COMPUTER LANGUAGE RESEARCH, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                  Years Ended December 31
-------------------------------------------------------------------------------
(In thousands)                                  1996        1995        1994
-------------------------------------------------------------------------------
OPERATING ACTIVITIES:
 Income from continuing operations            $  1,041    $  6,859    $ 11,022
 Adjustments to reconcile income to net
  cash provided by operating activities:
   Depreciation expense                          6,407       5,717       6,589
   Amortization expense                         12,816       7,140       4,047
   Other, net                                       39         626        (315)
   Charge for purchased research and
    development                                  3,498       5,600          --
   Changes in assets and liabilities, net
    of effect of acquisitions and sale of
    discontinued operations:
     Decrease (increase) in accounts
      receivable                                   858      (6,510)        250
     Increase in current deferred taxes           (328)        (80)       (584)
     Decrease (increase) in other current
      assets                                      (967)        131       1,409
     Decrease in other assets                      272         142         194
     Increase (decrease) in accounts
      payable                                    1,513      (1,503)        875
     Increase (decrease) in accrued
      compensation, payroll taxes,
      and benefits                                (818)      1,378       2,130
     Increase (decrease) in deferred revenue      (677)      6,531         662
     Decrease in accrued support                (1,469)     (2,124)       (114)
     Decrease in other current liabilities      (2,887)     (2,200)     (1,244)
     Increase (decrease) in deferred income
      taxes                                     (1,162)     (2,708)        678
     Increase in other liabilities               1,181       1,094         185
     Cash provided by discontinued operations       --       1,318       1,599
-------------------------------------------------------------------------------
       Net cash provided by operating
        activities                              19,317      21,411      27,383
-------------------------------------------------------------------------------
INVESTING ACTIVITIES:
 Capital expenditures                           (6,353)     (5,426)     (4,188)
 Additions to software                          (7,627)     (7,809)     (4,693)
 Cash paid for acquisitions                    (12,746)    (16,186)     (4,300)
 Net proceeds from sale of discontinued
  operations                                        --       3,497          --
 Purchases of short-term investments                --        (160)    (16,771)
 Proceeds from sale of short-term investments       --      16,821      18,373
 Disposals of property and equipment                33         229       1,009
-------------------------------------------------------------------------------
       Net cash used in investing activities   (26,693)     (9,034)    (10,570)
-------------------------------------------------------------------------------




                                       26
<PAGE>
                        COMPUTER LANGUAGE RESEARCH, INC.

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                                                  Years Ended December 31
-------------------------------------------------------------------------------
(In thousands)                                  1996        1995        1994
-------------------------------------------------------------------------------
FINANCING ACTIVITIES:
 Proceeds from issuance of line of
  credit note payable                            2,000          --          --
 Payments on long-term debt                       (749)       (563)     (8,494)
 Proceeds from exercise of common
  stock options                                  1,104       1,187         516
 Payments of dividends                          (5,692)     (5,612)     (5,007)
-------------------------------------------------------------------------------
       Net cash used in financing
        activities                              (3,337)     (4,988)    (12,985)
-------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
 EQUIVALENTS                                   (10,713)      7,389       3,828
CASH AND CASH EQUIVALENTS AT BEGINNING
 OF YEAR                                        13,641       6,252       2,424
-------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR      $  2,928    $ 13,641    $  6,252
===============================================================================

          See accompanying Notes to Consolidated Financial Statements.
                                        
                                        
                                        
                                        
                                        
                SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION

                                                  Years Ended December 31
-------------------------------------------------------------------------------
(In thousands)                                  1996        1995        1994
-------------------------------------------------------------------------------
Cash payments for:
 Interest (net of amounts capitalized)        $     --    $      8    $    399
 Income taxes (net of refunds)                $  3,400    $  6,851    $  7,583
===============================================================================



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

-----------------------
NOTE 1.   ORGANIZATION

The Company, headquartered in Carrollton, Texas, maintains sales and support
facilities throughout the United States and develops and provides tax and
accounting software and services to accounting firms, banks, corporations, and
partnerships under the trade name Fast-Tax.  The Company also develops and
markets residential real estate property management software and services to
large property management firms and owners of multifamily properties under the
trade name Rent Roll.
                                       27
<PAGE>
-----------------------------------------------------
NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the
accounts of Computer Language Research, Inc. and all wholly-owned subsidiaries
(combined, the "Company").  All intercompany transactions and balances have been
eliminated.

USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes.  Actual results could differ from those
estimates.

RECLASSIFICATIONS - Certain amounts for the prior years have been reclassified
to conform to the current year's presentation.

CASH EQUIVALENTS - The Company considers all highly liquid debt instruments
purchased with a maturity of three months or less to be cash equivalents.  The
Company had no cash equivalents at December 31, 1996, and $12.6 million and $4.6
million at December 31, 1995, and 1994, respectively.

DEPRECIATION - Property and equipment are recorded at cost, and depreciation is
computed using the straight-line method over the following estimated useful
lives:

    Buildings and improvements ............  5-30 years
    Data processing equipment .............  1-5 years
    Furniture, fixtures, and equipment ....  5-10 years

Amortization reported in the Consolidated Statements of Cash Flows includes
amortization of software, intangible assets, and assets recorded under capital
leases.

SOFTWARE COSTS - Internally developed software costs are capitalized after the
establishment of technological feasibility and are amortized over their
estimated economic life, generally three years, commencing when each product is
available for general release.  Internally developed software costs capitalized,
including interest, were $7.1 million, $7.1 million, and $4.2 million, in 1996,
1995, and 1994, respectively.

Amortization is based on the greater of a percentage of current product revenues
to total estimated product revenues or straight-line over the expected life of
the product.  The Company recognized amortization expense applicable to
internally developed software of $3.7 million, $3.1 million, and $2.6 million,
during 1996, 1995, and 1994, respectively.

INTANGIBLE ASSETS - Intangible assets primarily represent costs allocated to
customer lists, noncompete agreements, and other specifically identifiable
intangibles arising from acquisitions (see Notes 3 and 6).  Intangible assets
also include cost in excess of fair values of net assets acquired (goodwill) in
connection with these acquisitions.  These assets are carried at cost less
accumulated amortization which is calculated on a straight-line basis over the
estimated useful lives of the assets which range from 2.5 to 9 years.




                                       28
<PAGE>
-----------------------------------------------------------------
NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Amortization of intangible assets was $4.3 million, $2.3 million, and $1.5
million, for the years ended December 31, 1996, 1995, and 1994, respectively.

The Company periodically reviews intangible assets to assess recoverability, and
impairments would be recognized in operating results if a permanent reduction in
value were to occur.

INCOME TAXES - The liability method is used in accounting for income taxes.
Deferred tax assets and liabilities are determined based on the differences
between financial reporting and the tax bases of assets and liabilities, and are
measured using the currently enacted tax rates and laws.  See also Note 9.

REVENUE RECOGNITION - The Company provides tax and accounting information
software and services, and residential real estate property management software
and services.  Revenues from contracts based on a per return/report charge are
recognized during the month in which the services are provided.  Revenues from
site-license agreements are based on annual fees which include tax processing,
software, and support for the client throughout the year.  These fees are
recognized ratably over the annual contract period.  Sales of software and tax
processing systems are recognized when shipped.  Revenues for maintenance
contracts are recognized ratably over the respective contract period.

RESEARCH AND DEVELOPMENT - Research and development costs are expensed as
incurred and consist principally of certain software development costs incurred
prior to achieving technological feasibility.  Research and development expenses
were $6.2 million, $3.8 million, and $5.1 million in 1996, 1995, and 1994,
respectively.

EARNINGS PER SHARE - Earnings per share are computed based upon the weighted
average number of shares of common stock and common stock equivalents
outstanding.  Common stock equivalents represent the dilutive effect of the
assumed exercise of outstanding stock options using the treasury stock method.
No difference exists between primary and fully diluted earnings per share.


-----------------------
NOTE 3.   ACQUISITIONS

During 1996 the Company completed nine acquisitions at a total cost of $18.4
million, which consisted of $12.7 million in cash paid at closing and
liabilities of $5.7 million.

The acquisitions completed in the first quarter of 1996 were:  (i) E.F. Haskell
& Associates, Inc. - practice management software, (ii) Axtell Development
Corporation - fixed asset management software, (iii) Credit Interfaces, Inc. and
Renter Index, Inc. - applicant screening and other information services, (iv)
Project Data Systems, Inc. - affordable housing property management software,
and (v) Crystal Solutions, LLC - apartment asset management software.

In the third quarter of 1996 the acquisitions completed were:  (i) A&M Software,
Inc. - affordable housing property management software, and (ii) Automated
Research Technology Inc. - apartment eviction database.  In the fourth quarter
of 1996 the Rural Housing Services assets of Castle Lake Software, Inc. were
acquired.

                                       29
<PAGE>
-----------------------------------
NOTE 3.   ACQUISITIONS (Continued)

Based on appraised value, a portion of the combined purchase price was allocated
to purchased research and development (R&D) which had not reached technological
feasibility and had no alternative future use.  The allocation resulted in a
$3.5 million charge to the Company's operations in the first quarter of 1996.
The remainder of the combined purchase price was allocated to software,
goodwill, and other intangibles of $4.6 million, $3.0 million, and $5.3 million,
respectively, with the balance allocated to miscellaneous assets.  The software,
goodwill, and other intangibles will be amortized over weighted-average lives of
2.4 years, 5.0 years, and 4.6 years, respectively.

During 1995 the Company completed three acquisitions at a total cost of $21.2
million, which consisted of $15.5 million in cash paid at closing, an unsecured
note payable of $2.2 million, and liabilities of $3.5 million.

The asset acquisitions completed in April, June, and December 1995,
respectively, were:  (i) Sequel/ McGladrey Software - auditing software product
line, (ii) Rent Roll, Inc. - residential property management software, and (iii)
the corporate tax compliance software business of Price Waterhouse, LLP (PW).

Based on appraised value, a portion of the PW purchase price was allocated to
purchased R&D which had not reached technological feasibility and had no
alternative future use.  This allocation resulted in a $5.6 million charge to
the Company's operations in the fourth quarter of 1995.  The remaining combined
purchase price of the 1995 acquisitions was allocated to software, goodwill, and
other intangibles of $4.0 million, $3.8 million, and $6.7 million, respectively,
with $1.1 million allocated to miscellaneous assets.  The software, goodwill,
and other intangibles will be amortized over weighted-average lives of 4.4
years, 5.0 years, and 5.0 years, respectively.

All acquisitions were financed from the Company's cash flow (except as noted
above) and have been accounted for under the purchase method of accounting.  The
results of their operations have been included in the Company's Consolidated
Financial Statements since their respective acquisition dates.

The following unaudited pro forma summary presents the consolidated results of
operations as if the 1996 acquisitions discussed above had occurred as of the
beginning of each year presented.  In order to provide meaningful pro forma
results, comparative financial information for the 1995 acquisitions has also
been included.  The pro forma results give effect to certain adjustments,
including amortization of assets acquired, a reduction of support costs, an
increase in consulting expense, reductions in compensation and rent expense,
decreased interest income due to acquisition costs, and the related income tax
effects.  The results do not include the $5.6 million and $3.5 million charges
for purchased R&D.  These pro forma results have been prepared for comparative
purposes only and are not necessarily indicative of what the actual results of
operations would have been had the acquisitions been made as of those dates, nor
does it purport to represent future operations of the Company.








                                       30
<PAGE>
-----------------------------------
NOTE 3.   ACQUISITIONS (Continued)

----------------------------------------------------------------------
(In thousands, except per
share amounts)                                      1996       1995
----------------------------------------------------------------------
Pro forma
 Revenue                                          $133,311   $137,234
 Net income from continuing operations               2,233      2,545
 Net income                                          2,233      7,341
 Earnings per share from continuing operations    $   0.15   $   0.18
 Earnings per share                               $   0.15   $   0.51
----------------------------------------------------------------------


--------------------------------
NOTE 4.   MARKETABLE SECURITIES

The Company's cash equivalents were classified as available-for-sale securities.
At December 31, 1995, cash equivalents were invested in a money market mutual
fund.  The investments were carried at fair value as determined by a quoted
market price.  The cost of securities sold is based on the average cost method.
Gross sale proceeds from available-for-sale securities were $91.0 million,
$175.0 million, and $103.3 million in 1996, 1995, and 1994, respectively.
Realized and unrealized gains/losses were not significant for 1996, 1995, or
1994.


-----------------------------
NOTE 5.   RISK CONCENTRATION

The Company maintains cash and cash equivalents with various high quality
financial institutions.  Cash equivalents are invested in a money market mutual
fund.  The Company's investment policy limits the Company's exposure to
concentrations of credit risk.  The Company has not incurred losses related to
these investments.

The Company has clients that are dispersed across different geographic areas and
to a lesser extent among different industries.  The Company has a heavy
concentration of clients in accounting firms nationwide and maintains an
allowance for losses based upon the expected collectibility of all accounts
receivable.

No single customer accounted for 10% or more of the Company's consolidated
revenues in 1996, 1995, or 1994.  The Company provides tax processing services,
software, and support to each of the six largest accounting firms in the United
States.  While the loss of any one of these customers would not have a material
adverse consequence to the Company, the loss of more than one of these customers
could.








                                       31
<PAGE>
---------------------------------------
NOTE 6.   INTANGIBLES AND OTHER ASSETS

---------------------------------------------------------------------
(In thousands)                                      1996       1995
---------------------------------------------------------------------
Customer lists                                    $  7,675   $  7,675
Cost in excess of fair values of net assets
 acquired (Goodwill)                                 7,656      4,223
Noncompete agreements                                5,449      3,445
Trained workforce                                    3,997      3,686
Other intangibles                                    2,000        500
Other assets                                         1,282        268
---------------------------------------------------------------------
                                                    28,059     19,797
Less accumulated amortization                        8,952      5,219
---------------------------------------------------------------------
                                                  $ 19,107   $ 14,578
---------------------------------------------------------------------

For a discussion related to additions, see Note 3.


-------------------------------------------
NOTE 7.   LONG-TERM DEBT AND NOTES PAYABLE

During 1995 the Company had an unsecured loan agreement which provided a $12.0
million revolving credit loan and letter of credit facility.  The available
funds were based on eligible receivables and inventory.

On December 21, 1995, the Company entered into an unsecured $20.0 million
revolving credit/term facility (the "Facility") which replaced the agreement
discussed above.  The Facility will be fully revolving for two years, after
which time the Company must begin quarterly principal payments equal to one-
sixteenth of the outstanding principal balance with all outstanding principal
and interest due and payable in full on December 21, 2000. The Facility requires
that if the outstanding balance exceeds $10.0 million at the end of a quarter, a
$10.0 million portion will convert to a term loan and fully amortize over four
years.  The Facility also provides for the Company to elect term loan
conversions with a $5.0 million minimum, which will fully amortize over four
years.  The rate of interest payable is the lesser of, at the Company's option,
the prime rate or the interbank offering rate plus a margin, which is dependent
on the Company's fixed charge coverage ratio and can range from 0.875% to 1.5%.

The Company had borrowings of $2.0 million outstanding under the Facility at
December 31, 1996.  The rate of interest payable on 1996 borrowings was 8.25%
per annum.

At the lender's option, the revolving credit termination date and the Facility
expiration date may be extended.  The agreement includes customary financial
covenants requiring a minimum net worth, debt-to-net worth, debt coverage and
current ratios.  The agreement also includes customary restrictions upon
investments, indebtedness, and the sale of certain assets.

The long-term debt reflected on the balance sheet at December 31, 1996, and
1995, consists of the unsecured note payable executed in connection with the
Sequel/McGladrey software acquisition (see Note 3).  Under the terms of the

                                       32
<PAGE>
-------------------------------------------------------
NOTE 7.   LONG-TERM DEBT AND NOTES PAYABLE (Continued)

note, the Company is obligated to make quarterly principal payments of $187,500,
plus interest at 9% per annum.  The loan is due and payable in full on March 31,
1998.

The carrying amount of the note payable and long-term debt approximates fair
value, as the interest rates are not materially different from the prime rate at
December 31, 1996, and 1995.


----------------------------------------
NOTE 8.   COMMITMENTS AND CONTINGENCIES

Aggregate annual rental commitments at December 31, 1996, under operating leases
with initial or remaining noncancelable lease terms greater than one year are:

----------------------------------------
(In thousands)
----------------------------------------
1997                             $ 1,636
1998                               1,336
1999                                 882
2000                                 618
2001                                 302
Thereafter                            36
-----------------------------------------
Total minimum lease payments     $ 4,810
-----------------------------------------

Rent expense was $2.7 million, $2.0 million, and $1.9 million in 1996, 1995, and
1994, respectively.

In December 1995, the Company entered into a five-year consulting services
agreement with Price Waterhouse LLP (PW).  Under the terms of the agreement,
certain PW partners will be made available to the Company on a full-time basis
to assist it in integrating the Company's corporate tax software compliance
business (see Note 3).  At December 31, 1996, the Company is committed to pay PW
$5.0 million over the remaining four years of the contract.  The Company has
accrued a total of $3.1 million ($1.9 million during the fourth quarter of 1996)
as a result of its decisions to exercise options allowing for the early
termination of a portion of the consulting services.

The Company is from time to time subject to litigation.  Management believes
that the probable resolution of current litigation will not materially affect
the financial position of the Company.











                                       33
<PAGE>
-----------------------
NOTE 9.   INCOME TAXES

Significant components of the Company's deferred tax liabilities and assets as
of December 31, 1996, and 1995, are as follows (in thousands):

---------------------------------------------------------------------
                                                    1996       1995
---------------------------------------------------------------------
Deferred tax assets:
 Book depreciation in excess of
  tax depreciation                                $    769   $     --
 Tax basis in excess of book basis
  in land                                              730        730
 Cash basis adjustments for reserves                 2,689      2,788
 Amortization of intangibles                         4,162      3,125
 Other                                                 512        348
---------------------------------------------------------------------
Total deferred tax assets                            8,862      6,991
Valuation allowance for deferred tax assets           (833)      (833)
---------------------------------------------------------------------
Deferred tax assets                                  8,029      6,158
---------------------------------------------------------------------
Deferred tax liabilities:
 Tax depreciation in excess of book depreciation        --        456
 Software development costs capitalized for book     5,361      4,144
 Other                                                 953        670
---------------------------------------------------------------------
Deferred tax liabilities                             6,314      5,270
---------------------------------------------------------------------
Net deferred tax assets                           $  1,715   $    888
---------------------------------------------------------------------

Income tax expense has been allocated to:

---------------------------------------------------------------------
                                         1996       1995       1994
---------------------------------------------------------------------
Income from continuing operations      $    499   $  2,264   $  7,095
Income from discontinued operations          --         36        197
Gain on disposal of discontinued
 operations                                  --      3,052         --
---------------------------------------------------------------------
Total                                  $    499   $  5,352   $  7,292
---------------------------------------------------------------------













                                       34
<PAGE>
-----------------------------------
NOTE 9.   INCOME TAXES (Continued)

Significant components of the provision for income taxes attributable to
continuing operations are as follows:

---------------------------------------------------------------------
                                         1996       1995       1994
---------------------------------------------------------------------
Current:
 Federal                               $  2,149   $  3,990   $  6,014
 State                                     (180)       956        959
---------------------------------------------------------------------
Total current                             1,969      4,946      6,973
---------------------------------------------------------------------
Deferred:
 Federal                                 (1,296)    (2,271)       109
 State                                     (174)      (411)        13
---------------------------------------------------------------------
Total deferred                           (1,470)    (2,682)       122
---------------------------------------------------------------------
Total current and deferred             $    499   $  2,264   $  7,095
---------------------------------------------------------------------

The reconciliation of income tax attributable to continuing operations computed
at the U.S. federal statutory tax rates to income tax expense is:

---------------------------------------------------------------------
                                         1996       1995       1994
---------------------------------------------------------------------
Tax at U.S. statutory rates            $    539   $  3,193   $  6,325
State taxes                                (230)       342        597
Purchased R&D with no future
 tax benefit                                476         --         --
R&D tax credit                             (557)    (1,353)        --
Meals and entertainment                     228        191        131
Goodwill                                     66         32          9
Increase in valuation allowance              --        203         --
Other                                       (23)      (344)        33
---------------------------------------------------------------------
Income tax expense                     $    499   $  2,264   $  7,095
---------------------------------------------------------------------


------------------------
NOTE 10.  Stock Options

In 1982, the shareholders of the Company adopted a stock option plan which
provides for options to be granted to members of management and key
nonmanagement employees of the Company for the purchase of common stock.  The
term of each option is determined at grant by the Board of Directors'
Compensation Committee.  The plan, as amended in April 1993, provides that a
maximum of 1,500,000 shares are available for grant, and terminates on December
31, 2002.




                                       35
<PAGE>
------------------------------------
NOTE 10.  Stock Options (Continued)

In February 1997, the Board of Directors adopted the 1997 Stock Incentive Plan
for the Company under which 1,000,000 shares of common stock are available for
future grants.  The Board of Directors also approved the 1997 Stock Incentive
Plan for the Company's wholly-owned subsidiary, Rent Roll, Inc. (Rent Roll), and
recommended that the Rent Roll Board of Directors adopt such Plan under which
2,000,000 shares of Rent Roll's common stock are available for future grants.
The plans are subject to shareholder approval at the Company's annual meeting of
shareholders on May 1, 1997.

In May 1995, the shareholders of the Company approved a stock option plan which
provides for options to be granted to non-employee directors of the Company for
purchase of common stock.  The plan provides that a maximum of 250,000 shares
are available for the grant of options and terminates on August 4, 2004.

The exercise price of the options (under the current plans) is determined by the
fair market value of the Company's common stock on the date of grant.  Stock
options currently outstanding under both plans become exercisable in 20% annual
installments beginning in the year following the grant.  Total options out-
standing which were exercisable amounted to 338,353 at December 31, 1996,
270,383 at December 31, 1995, and 260,582 at December 31, 1994.

Information with respect to these plans follows:

          Management and Key Nonmanagement Employees
---------------------------------------------------------------
                                     Price per        Number of
Options                                Share           Shares
---------------------------------------------------------------
Balance at Dec. 31, 1993          $ 3.56 - $ 6.25      917,300
1994 Activity:
 Granted                          $ 8.25 - $ 9.00      125,000
 Canceled                         $ 3.56 - $ 4.50       57,800
 Exercised                        $ 3.56 - $ 4.50      100,918
---------------------------------------------------------------
Balance at Dec. 31, 1994          $ 3.56 - $ 9.00      883,582
1995 Activity:
 Granted                          $ 8.00 - $10.25      303,350
 Canceled                         $ 3.56 - $10.25       52,000
 Exercised                        $ 3.56 - $ 9.00      185,499
---------------------------------------------------------------
Balance at Dec. 31, 1995          $ 3.56 - $10.25      949,433
1996 Activity:
 Granted                          $15.63 - $16.00      160,000
 Canceled                         $ 3.63 - $16.00      197,600
 Exercised                        $ 3.56 - $ 9.00      142,650
---------------------------------------------------------------
Balance at Dec. 31, 1996          $ 3.56 - $16.00      769,183
---------------------------------------------------------------
Shares reserved for options
 outstanding and future options
 at Dec. 31, 1996                                      906,988
---------------------------------------------------------------



                                       36
<PAGE>
------------------------------------
NOTE 10.  Stock Options (Continued)

                    Non-Employee Directors
---------------------------------------------------------------
                                     Price per        Number of
Options                                Share           Shares
---------------------------------------------------------------
Balance at Dec. 31, 1994                 --                 --
1995 Activity:
 Granted                          $ 8.00 - $ 9.75       50,000
---------------------------------------------------------------
Balance at Dec. 31, 1995          $ 8.00 - $ 9.75       50,000
1996 Activity:
 Granted                              $15.75            12,500
---------------------------------------------------------------
Balance at Dec. 31, 1996          $ 8.00 - $15.75       62,500
---------------------------------------------------------------
Shares reserved for options outstanding
 and future options at Dec. 31, 1996                   250,000
---------------------------------------------------------------

The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard No. 123, "Accounting for Stock-Based Compensation"
(SFAS123).  The new accounting standards prescribed are optional, and the
Company has elected to continue accounting for its stock option plans under APB
Opinion No. 25, and has adopted the disclosure-only provisions of SFAS123.
Accordingly, no compensation cost has been recognized for the stock option
plans.  Had compensation cost been determined based on the fair value of the
options at the grant date for awards in 1995 and 1996, consistent with the
provisions of SFAS123, the Company's net earnings and earnings per share would
have been the pro forma amounts indicated below:

---------------------------------------------------------------------
(In thousands, except per share amounts)            1996       1995
---------------------------------------------------------------------
Pro forma net income                              $    896   $ 11,601
Pro forma earnings per share                      $   0.06   $   0.81
---------------------------------------------------------------------

Because SFAS123 is applicable only to options and stock-based awards granted
subsequent to December 31, 1994, its pro forma effect will not be fully
reflected until 1999.

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

---------------------------------------------------------------------
                                                    1996       1995
---------------------------------------------------------------------
Risk-free interest rate                              6.2%       6.3%
Expected dividend yield                              2.5%       3.9%
Expected volatility                                 35.9%      37.2%
Expected lives                                     5.0 yrs    5.0 yrs
Weighted average remaining contractual life        5.0 yrs    5.8 yrs
---------------------------------------------------------------------
                                        
                                       37
<PAGE>
------------------------------------
NOTE 10.  Stock Options (Continued)

The weighted average fair value of options granted in 1996 and 1995 was $5.23
and $3.04, respectively.

Weighted average exercise prices are as follows:

---------------------------------------------------------------------
                                         1996       1995       1994
---------------------------------------------------------------------
Outstanding at Jan. 1                  $   6.84   $   4.89   $   4.19
Granted                                   15.93      10.06       8.72
Canceled                                  10.13       5.33       4.03
Exercised                                  4.57       4.10       3.82
Outstanding at Dec. 31                     8.33       6.84       4.89
Excercisable at Dec. 31                    5.77       4.62       4.02
---------------------------------------------------------------------

Certain information is being presented based on a range of exercise prices as
follows:

---------------------------------------------------------------------
                                       $  3.56-   $  8.00-   $ 15.63-
                                       $  6.25    $ 12.00    $ 16.00
---------------------------------------------------------------------
Number of shares outstanding            324,833    394,350    112,500
Weighted-average exercise price
 of shares outstanding                 $   4.09   $   9.66   $  15.89
Weighted-average remaining
 contractual life                       3.5 yrs    6.0 yrs    6.0 yrs
Number of shares exercisable            226,083    109,770      2,500
Weighted-average exercise price
 of shares exercisable                 $   3.94   $   9.33   $  15.75
---------------------------------------------------------------------


----------------------------------
NOTE 11.  DISCONTINUED OPERATIONS

In June 1995, the Company sold substantially all of the assets of its wholly-
owned subsidiary, Electronic Form Systems Incorporated (EFS), to Vanier Graphics
Corporation, a wholly-owned subsidiary of American Business Products, Inc.
(ABP).  The operating results of EFS were treated as discontinued operations.
As consideration for the sale, the Company received cash of $3.0 million, shares
of ABP common stock valued at $6.0 million and a receivable for $0.8 million,
which was paid in full by October 1995.  The sale resulted in a gain of $4.7
million, net of taxes of $3.1 million.

The ABP common stock received was subsequently sold on the open market with an
immaterial gain, and the proceeds are included in proceeds from sale of short-
term investments on the Consolidated Statements of Cash Flows.






                                       38
<PAGE>
Report of Ernst & Young LLP,
Independent Auditors



To the Board of Directors and Shareholders
     of Computer Language Research, Inc.



We have audited the accompanying consolidated balance sheets of Computer
Language Research, Inc. (the "Company") as of December 31, 1996, and 1995, and
the related consolidated statements of income, shareholders' equity and cash
flows for each of the three years in the period ended December 31, 1996.  Our
audits also included the financial statement schedule listed in the Index at
Item 14(a).  These financial statements and schedule are the responsibility of
the Company's management.  Our responsibility is to express an opinion on these
financial statements 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
misstatements.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of the
Company at December 31, 1996, and 1995, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.
Also, in our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.


                                                             Ernst & Young LLP



Dallas, Texas
February 14, 1997













                                       39
<PAGE>
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

None.


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information concerning the Directors of the Company is incorporated herein by
reference to the Company's Definitive Proxy Statement for the Company's Annual
Meeting of Shareholders.  It is expected such Proxy Statement will be filed with
the Securities and Exchange Commission no later than 120 days subsequent to
December 31, 1996.

Information concerning the executive officers of the Company is as follows:

                                                                      EXECUTIVE
                                                                       OFFICER
                           AGE                  OFFICE                  SINCE
                           ---        --------------------------      ---------
   Charles A. Cappiccille   50        Group Vice President              1996
                                      Bank Market

   James J. Charles         50        Group Vice President              1996
                                      Core Technology

   Robert H. Dilworth       50        Vice President,                   1995
                                      Business Development
                                      and Investor Relations

   Lynn J. Finlinson        49        President                         1996
                                      Rent Roll, Inc.

   Douglas H. Gross         53        Vice President,                   1990
                                      Secretary, and
                                      General Counsel

   G. Allen Harris          46        Group Vice President              1996
                                      Corporate Tax Market

   M. Brian Healy           53        Group Vice President,             1989
                                      Finance and Administration
                                      and Chief Financial Officer

   Charles W. Hill          57        Controller and Treasurer          1987

   William T. Lynch         50        Group Vice President              1996
                                      Accounting Tax Market

   Francis W. Winn          79        Chairman of the Board             1969

   Stephen T. Winn          50        President, Chief Executive        1971
                                      Officer, and Director



                                       40
<PAGE>
Mr. Cappiccille is the Group Vice President of the bank segment with
responsibility for sales, marketing, product development, and support.  He
joined the Company in July 1992 with the acquisition of FTS Corporation.  He had
been associated with FTS since its inception in 1981 and was with CCH Computax
from 1986 until 1992.

Mr. Charles joined the Company in 1983 and has served as the leader of various
business units of the Company including bank, corporate, partnership, and
product development.  Prior to joining the Company (1979 to 1983), he was a
founder, partner, and senior vice president of operations for Just Technical
Associates (JTA), which provided systems programming and strategic planning to
technology related industries.  Prior to joining JTA, he was employed by
Electronic Data Systems where he served in various technical and managerial
positions.  Currently he serves on the technical advisory councils of Lotus
Development and Sybase Corporations.

Mr. Dilworth joined the Company in May 1975 as a salesman serving in various
sales and sales management positions and led the sales and marketing department
of the Company's bank segment from June 1982 until January 1993.  Mr. Dilworth
was elected Vice President of the bank segment in January 1992.  In January
1993, Mr. Dilworth became the Vice President of Business Development and began
the Company's strategic acquisition program and, in 1994, also assumed Investor
Relations responsibilities.  Prior to joining the Company, Mr. Dilworth served
in various sales and sales management positions in other companies, including
ATV Manufacturing, the Sauter Labs division of Hoffmann La-Roche, and EDS.

Mr. Finlinson serves as President of Rent Roll, Inc., which was acquired by CLR
in June of 1995 and later incorporated as a wholly-owned subsidiary in December
of that year.  Mr. Finlinson has over 17 years of experience in the real estate
industry including management, property development, investment, and software
development.  Prior to joining CLR, he was a founding owner and CEO of Rent
Roll, Inc., a software and services provider to the multifamily housing
management industry, for over eight years.

Mr. Gross joined the Company as General Counsel and was elected Secretary in
March 1990; in February 1993, he was elected a Vice President.  From September
1987 until joining the Company, he served as General Counsel to Redman
Industries, the country's second largest builder of manufactured housing and a
manufacturer of building products.  From January 1986 until September 1987, he
served as General Counsel to MidSouth Pepsi Bottling, Inc., the country's
largest, privately held Pepsi-Cola franchisee.  Prior to 1986 Mr. Gross served
in the law departments of Westinghouse Electric Corporation and PepsiCo, Inc.

Mr. Harris joined the Company in February 1994 and serves as the Group Vice
President of the corporate segment with responsibility for product development,
sales, marketing, and support for all products delivered to the corporate
marketplace.  Mr. Harris has more than 23 years of experience in the information
technology industry.  He was formerly a management consulting partner with Ernst
& Young and held a key position with Dun & Bradstreet Software, formerly MSA
Software.

Mr. Healy, a Certified Public Accountant, joined the Company in August 1989 as
Group Vice President of Finance and Administration and Chief Financial Officer.
Prior to joining the Company, he was Senior Vice President and Chief Financial
Officer at the Talent Tree Corporation, a temporary help firm, from 1988 to
1989.  From 1985 to 1988, Mr. Healy was Vice President, Finance, and Chief
Financial Officer for Redman Industries, the country's second largest builder of

                                       41
<PAGE>
manufactured housing and a manufacturer of building products.  For eleven years
prior to 1985 he held various executive positions with Anthony Industries, Inc.,
a California-based manufacturer of recreational and industrial products.

Mr. Hill, a Certified Public Accountant, joined the Company in 1987.  Prior to
joining the Company, he was Senior Vice-President, Finance and Administration,
with Peer Services, Inc., a banking data services company, for six years.  He
has served in various financial management positions in other companies
including Audit Partner with Main, Hurdman and Co.

Mr. Lynch joined the Company in October 1978 in a sales and operations position.
Since joining the Company, he has served in various sales, marketing, and
operational capacities.  Prior to joining the Company, he was employed by CCH
Computax, Inc. for 10 years in various technical and managerial positions.

Francis W. Winn, the founder of the Company and a Director since 1969, served as
its Chairman of the Board and President from February 1969 until May 1977, and
continues to serve as Chairman of the Board.  Prior to founding the Company, Mr.
Winn was employed by various petroleum or petroleum-related companies in
research management.  Mr. Winn is the father of Stephen T. Winn and Dr. David L.
Winn and the father-in-law of James R. Dunaway, Jr., all Directors of the
Company.

Stephen T. Winn has served as a Director since 1969 and as President and Chief
Executive Officer since May 1977.  Mr. Winn served as Executive Vice President
from 1971 until his election as President in 1977.  Mr. Winn was selected as a
Sloan Fellow at Stanford University in 1980 and holds an M.M.S. degree in
Management Science from Stanford.  He has served as a member of the Stanford
University Sloan Advisory Board, American Business Conference, and the American
Electronics Association.

All directors hold office until the next annual meeting of the shareholders of
the Company and until their successors are elected and qualified.  The executive
officers are elected annually by the Board of Directors following the annual
meeting of the shareholders and serve until their successors are duly elected
and qualified.

Based solely on the review of the copies of such forms furnished to the Company,
or written representations that no Forms 5 were required, the Company believes
that during 1996 all Section 16 (a) filing requirements applicable to its
greater than 10% beneficial owners, directors, and officers were complied with.


ITEM 11.  EXECUTIVE COMPENSATION

Incorporated herein by reference to the Company's Definitive Proxy Statement
for the Company's Annual Meeting of Shareholders except as set forth in such
Proxy Statement.  It is expected such Proxy Statement will be filed with the
Securities and Exchange Commission no later than 120 days subsequent to
December 31, 1996.


                                        
                                        
                                        
                                        
                                        
                                        
                                       42
<PAGE>
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Incorporated herein by reference to the Company's Definitive Proxy Statement
for the Company's Annual Meeting of Shareholders except as set forth in such
Proxy Statement.  It is expected such Proxy Statement will be filed with the
Securities and Exchange Commission no later than 120 days subsequent to
December 31, 1996.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated herein by reference to the Company's Definitive Proxy Statement
for the Company's Annual Meeting of Shareholders except as set forth in such
Proxy Statement.  It is expected such Proxy Statement will be filed with the
Securities and Exchange Commission no later than 120 days subsequent to
December 31, 1996.


                                     PART IV


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

(a)  1.   Financial Statements

          The consolidated financial statements included in Item 8, Financial
          Statements and Supplementary Data, are set forth in the Index to
          Financial Statements and Financial Statement Schedules listed on page
          46 of this report.

     2.   Financial Statement Schedules

          The consolidated financial statement schedule is set forth in the
          Index to Financial Statements and Financial Statement Schedules listed
          on page 46 of this report.

     3.   Exhibits

          The following documents are filed or incorporated by reference as
          exhibits to this report.  The exhibit numbers in the exhibit list
          correspond to the numbers assigned to such exhibits in the Exhibit
          Table of Item 601 of Regulation S-K:

          2.01   Asset Purchase Agreement dated June 23, 1995, between
                 Electronic Form Systems Incorporated, a wholly-owned
                 subsidiary of Registrant, and Vanier Graphics Corporation, a
                 wholly-owned subsidiary of American Business Products, Inc.,
                 (incorporated herein by reference to Registrant's Current
                 Report on Form 8-K dated June 30, 1995, filed with the
                 Securities and Exchange Commission).

          2.02   Agreement for the Purchase and Sale of Certain Assets dated
                 December 2, 1995, between Registrant and Price Waterhouse LLP,
                 (incorporated herein by reference to Exhibit 2.01 to
                 Registrant's Current Report on Form 8-K dated December 18,
                 1995, filed with the Securities and Exchange Commission).


                                       43
<PAGE>
          3.01   Articles of Incorporation of Registrant filed with the State
                 of Texas on February 26, 1969, (incorporated herein by
                 reference to Exhibit 3.01 to Registrant's Amendment No. 1 to
                 Registration Statement on Form S-1, Registration No. 2-83286,
                 filed with the Securities and Exchange Commission).

          3.02   Amendment to Articles of Incorporation of Registrant filed
                 with the State of Texas on September 14, 1982, (incorporated
                 herein by reference to Exhibit 3.02 to Registrant's Annual
                 Report on Form 10-K for the year ended December 31, 1993,
                 filed with the Securities and Exchange Commission).

          3.03   Amendment to Articles of Incorporation of Registrant filed
                 with the State of Texas on September 14, 1982, (incorporated
                 herein by reference to Exhibit 3.03 to Registrant's Annual
                 Report on Form 10-K for the year ended December 31, 1993,
                 filed with the Securities and Exchange Commission).

          3.04   Amendment to Articles of Incorporation of Registrant filed
                 with the State of Texas on April 22, 1983, (incorporated
                 herein by reference to Exhibit 3.04 to Registrant's Annual
                 Report on Form 10-K for the year ended December 31, 1993,
                 filed with the Securities and Exchange Commission).

          3.05   Amendment to Articles of Incorporation of Registrant filed
                 with the State of Texas on May 25, 1983, (incorporated herein
                 by reference to Exhibit 3.05 to Registrant's Annual Report on
                 Form 10-K for the year ended December 31, 1993, filed with the
                 Securities and Exchange Commission).

          3.06   Amendment to Articles of Incorporation of Registrant filed
                 with the State of Texas on June 24, 1988, (incorporated herein
                 by reference to Exhibit 3.06 to Registrant's Annual Report on
                 Form 10-K for the year ended December 31, 1993, filed with the
                 Securities and Exchange Commission).

          3.07   Amended and restated Bylaws of Registrant, effective February
                 22, 1996, and included herewith.

          4.01   Definitive Specimen Stock Certificate representing shares of
                 Common Stock (incorporated herein by reference to Exhibit 4.01
                 to Registrant's Amendment No. 1 to Registration Statement on
                 Form S-1, Registration No. 2-83286, filed with the Securities
                 and Exchange Commission).

         10.01   Registrant's 1982 Stock Option Plan (incorporated herein by
                 reference to Exhibit 10.05 to Registrant's Registration
                 Statement on Form S-1, Registration No. 2-83286, filed with the
                 Securities and Exchange Commission).

         10.02   Amendment to Registrant's 1982 Stock Option Plan as of April
                 28, 1988, (incorporated herein by reference to Exhibit 10.06 to
                 Registrant's Annual Report on Form 10-K for the year ended
                 December 31, 1988, filed with the Securities and Exchange
                 Commission).



                                       44
<PAGE>
         10.03   Second Amendment to Registrant's 1982 Stock Option Plan as of
                 April 27, 1993, (incorporated herein by reference to Exhibit
                 10.03 to Registrant's Annual Report on Form 10-K for the year
                 ended December 31, 1993, filed with the Securities and Exchange
                 Commission).

         10.04   Registrant's Non-Employee Directors' 1994 Stock Option Plan
                 (incorporated herein by reference to Exhibit 99.1 to
                 Registrant's Registration Statement on Form S-8, Registration
                 No. 33-61457, filed with the Securities and Exchange
                 Commission).

         10.05   Registrant's 1989 Annual Incentive Plan (incorporated herein by
                 reference to Exhibit 10.05 to Registrant's Annual Report on
                 Form 10-K for the year ended December 31, 1989, filed with the
                 Securities and Exchange Commission).

         10.06   Amendment 1 to Registrant's 1989 Annual Incentive Plan as of
                 February 21, 1989, (incorporated herein by reference to Exhibit
                 10.06 to Registrant's Annual Report on Form 10-K for the year
                 ended December 31, 1989, filed with the Securities and Exchange
                 Commission).

         10.07   Amendment 2 to Registrant's 1989 Annual Incentive Plan as of
                 February 27, 1992, (incorporated herein by reference to Exhibit
                 10.06 to Registrant's Annual Report on Form 10-K for the year
                 ended December 31, 1993, filed with the Securities and Exchange
                 Commission).

         10.08   Employment, Confidentiality & Noncompete Agreement dated June
                 16, 1995, between Registrant and Lynn J. Finlinson
                 (incorporated herein by reference to Exhibit 10.09 to
                 Registrant's Annual Report on Form 10-K for the year ended
                 December 31, 1995, filed with the Securities and Exchange
                 Commission).

         21.01   Subsidiaries of Computer Language Research, Inc.

         23.01   Consent of Ernst & Young LLP, independent auditors.

(b)  Reports on Form 8-K.  No reports were filed on Form 8-K during the fourth
     quarter of 1996.
















                                       45
<PAGE>
                        INDEX TO FINANCIAL STATEMENTS AND
                          FINANCIAL STATEMENT SCHEDULES
                                        
                                   ITEM 14 (a)
                                        
                                        
                                        
                                                                        Page
                                                                        ----
CONSOLIDATED FINANCIAL STATEMENTS

  Consolidated Balance Sheets at December 31, 1996 and 1995 ........     22

  Consolidated Statements of Income for the Years Ended
   December 31, 1996, 1995, and 1994 ................................    24

  Consolidated Statements of Shareholders' Equity for the
   Years Ended December 31, 1996, 1995, and 1994 ....................    25

  Consolidated Statements of Cash Flows for the Years
   Ended December 31, 1996, 1995, and 1994 ..........................    26

  Notes to Consolidated Financial Statements ........................    27

  Report of Independent Auditors ....................................    39




CONSOLIDATED FINANCIAL STATEMENT SCHEDULES

  Schedule II -- Valuation and Qualifying Accounts ...................   47


All other schedules are omitted as the required information is inapplicable.























                                       46
<PAGE>
                                                             SCHEDULE II
                                        
                                        
                        COMPUTER LANGUAGE RESEARCH, INC.
                                        
                        VALUATION AND QUALIFYING ACCOUNTS
                                        
        For Each of the Three Years in the Period Ended December 31, 1996
                                 (In thousands)
                                        
                                        
                                        
                                        
                         Allowance for Doubtful Accounts
                         -------------------------------


                                   Charged to
                    Beginning      Costs and      Deductions      Ending
        Year         Balance        Expenses      and Other       Balance
        ----        ---------      ----------     ----------      -------

        1994          $ 989          $ 278          $ 662          $ 605
        1995          $ 605          $ 271          $ 268          $ 608
        1996          $ 608          $ 187          $  (5)         $ 800

































                                       47
<PAGE>


SIGNATURES

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


                                 COMPUTER LANGUAGE RESEARCH, INC.


                                 By:  M. Brian Healy
                                      ----------------------------------
                                      M. Brian Healy
                                      Group Vice President, Finance and
                                      Administration and Chief Financial
                                      Officer
                                      (Principal Financial and
                                      Accounting Officer)


Date:  March 21, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant in
the capacities indicated on March 21, 1997.


Francis W. Winn                       Max D. Hopper
----------------------------------    ----------------------------------
Francis W. Winn                       Max D. Hopper
Chairman of the Board                 Director


Stephen T. Winn                       Merle J. Volding
----------------------------------    ----------------------------------
Stephen T. Winn                       Merle J. Volding
President, Chief Executive            Director
Officer, and Director
(Principal Executive Officer)


M. Brian Healy                        David L. Winn
----------------------------------    ----------------------------------
M. Brian Healy                        David L. Winn
Group Vice President, Finance         Director
and Administration and Chief
Financial Officer
(Principal Financial and
Accounting Officer)


James R. Dunaway
----------------------------------
James R. Dunaway
Director
                                        
                                       48