FORM 10-Q.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the period ended September 7, 2002
or
[ ] Transition Report Pursuant to Section 13 of 15(d) of the Securities Exchange
Act of 1934 For the transition period _______________to________________________
Commission File Number: 2-28286
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The Bureau of National Affairs, Inc.
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Exact name of registrant as specified in its charter
Delaware 53-0040540
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1231 25th St., N.W. Washington, D.C. 20037
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(Address of principal executive offices) (Zip Code)
(202)452-4200
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(Registrant's telephone number, including Area Code)
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 and (2) has been subject to the filing requirements for
the past 90 days. Yes ___X___ No ______
The number of shares outstanding of each of the issuer's classes of common
stock, as of September 22, 2002 was 15,337,725 Class A common shares, 18,324,819
Class B common shares, and 1,312,825 Class C common shares.
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE 36-WEEKS ENDED SEPTEMBER 7, 2002 and SEPTEMBER 8, 2001
(Unaudited)
(In thousands of dollars, except per share amounts)
36 Weeks Ended
-----------------------------------
September 7, September 8,
2002 2001
---------------- ----------------
OPERATING REVENUES $ 207,013 $ 207,269
---------------- ----------------
OPERATING EXPENSES:
Editorial, production, and distribution 112,550 114,663
Selling 37,540 45,490
General and administrative 37,354 36,162
Profit sharing 1,687 1,545
---------------- ----------------
189,131 197,860
---------------- ----------------
OPERATING PROFIT 17,882 9,409
---------------- ----------------
NON-OPERATING INCOME:
Investment income 4,837 6,450
Interest expense (4,159) (4,019)
Other income, net 74 316
---------------- ----------------
TOTAL NON-OPERATING INCOME 752 2,747
---------------- ----------------
INCOME BEFORE PROVISION FOR INCOME TAXES AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE 18,634 12,156
PROVISION FOR INCOME TAXES 6,248 3,776
---------------- ----------------
INCOME BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 12,386 8,380
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (4,440) --
---------------- ----------------
NET INCOME 7,946 8,380
OTHER COMPREHENSIVE INCOME (EXPENSE) (1,038) 419
---------------- ----------------
COMPREHENSIVE INCOME $ 6,908 $ 8,799
================ ================
EARNINGS PER SHARE:
INCOME BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE $ .35 $ .22
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (.13) --
---------------- ----------------
NET INCOME $ .22 $ .22
================ ================
WEIGHTED AVERAGE SHARES OUTSTANDING 35,691,390 38,266,685
================ ================
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE 12-WEEKS ENDED SEPTEMBER 7, 2002 and SEPTEMBER 8, 2001
(Unaudited)
(In thousands of dollars, except per share data)
12 Weeks Ended
-----------------------------------
September 7, September 8,
2002 2001
---------------- ----------------
OPERATING REVENUES $ 68,456 $ 71,366
OPERATING EXPENSES:
Editorial, production, and distribution 37,818 37,965
Selling 12,414 14,879
General and administrative 12,360 12,843
Profit sharing 507 761
---------------- ----------------
63,099 66,448
---------------- ----------------
OPERATING PROFIT 5,357 4,918
NON-OPERATING INCOME:
Investment income 1,493 1,794
Interest expense (1,354) (1,441)
Other income, net 23 (26)
---------------- ----------------
TOTAL NON-OPERATING INCOME (EXPENSE) 162 327
---------------- ----------------
INCOME BEFORE PROVISION FOR INCOME TAXES 5,519 5,245
PROVISION FOR INCOME TAXES 1,730 1,940
---------------- ----------------
NET INCOME 3,789 3,305
---------------- ----------------
OTHER COMPREHENSIVE EXPENSE (513) 561
---------------- ----------------
COMPREHENSIVE INCOME $ 3,276 $ 3,866
================ ================
EARNINGS PER SHARE $ .11 $ .09
---------------- ----------------
WEIGHTED AVERAGE SHARES OUTSTANDING 34,894,934 37,658,035
================ ================
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 7, 2002 AND DECEMBER 31, 2001
(In Thousands of Dollars)
September 7,
2002 December 31,
ASSETS (Unaudited) 2001
- ----------------------------- ---------------- ----------------
CURRENT ASSETS:
Cash and cash equivalents $ 22,906 $ 23,972
Short-term investments, at fair value 28,580 7,288
Receivables (net of allowance for
doubtful accounts of $1,697 in 2002
and $2,195 in 2001) 28,877 45,097
Inventories, at lower of average
cost or market 5,012 3,726
Prepaid expenses 3,724 4,440
Deferred selling expenses 5,797 6,265
Deferred income taxes 6,140 5,951
---------------- ----------------
Total current assets 101,036 96,739
---------------- ----------------
MARKETABLE SECURITIES 86,797 116,656
---------------- ----------------
PROPERTY AND EQUIPMENT:
Land 4,250 4,250
Building and improvements 50,988 50,922
Furniture, fixtures and equipment 51,125 52,017
---------------- ----------------
106,363 107,189
Less-Accumulated depreciation 72,467 70,724
---------------- ----------------
Net property and equipment 33,896 36,465
---------------- ----------------
DEFERRED INCOME TAXES 24,171 23,637
---------------- ----------------
GOODWILL 73,755 76,700
---------------- ----------------
INTANGIBLE ASSETS 33,207 37,208
---------------- ----------------
OTHER ASSETS 129 133
---------------- ----------------
Total assets $ 352,991 $ 387,538
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 7, 2002 AND DECEMBER 31, 2001
(In thousands of dollars)
September 7,
2002 December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited) 2001
- ------------------------------------ ---------------- ----------------
CURRENT LIABILITIES:
Accounts payable $ 18,273 $ 19,699
Employee compensation and benefits payable 24,630 23,757
Income taxes payable 4,768 1,265
Deferred subscription revenue 119,817 132,378
---------------- ----------------
Total current liabilities 167,488 177,099
LONG TERM DEBT 80,000 84,000
POSTRETIREMENT BENEFITS, less current portion 69,528 65,734
OTHER LIABILITIES 5,886 5,829
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Total liabilities 322,902 332,662
---------------- ----------------
STOCKHOLDERS' EQUITY:
Capital stock, common, $1.00 par value-
Class A - Voting; Authorized 30,000,000
shares; issued 30,000,000 shares 30,000 30,000
Class B - Nonvoting; authorized
30,000,000 shares; issued 24,634,865 shares 24,635 24,635
Class C - Nonvoting; authorized
5,000,000 shares; issued 2,531,680 shares 2,532 2,532
Additional paid-in capital 3,870 1,249
Retained earnings 88,832 86,373
Treasury stock at cost - 22,275,494 shares
in 2002 and 19,674,190 in 2001 (118,010) (89,181)
Elements of comprehensive income:
Net unrealized loss on marketable securities (1,786) (719)
Foreign currency translation adjustment 16 (13)
---------------- ----------------
Total stockholders' equity 30,089 54,876
---------------- ----------------
Total liabilities and
stockholders' equity $ 352,991 $ 387,538
================ ================
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CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 36-WEEKS ENDED SEPTEMBER 7, 2002 and SEPTEMBER 8, 2001
(Unaudited)
(In thousands of dollars)
36 Weeks Ended
-----------------------------------
September 7, September 8,
2002 2001
---------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,946 $ 8,380
Items with different cash requirements
than reflected in net income--
Cumulative effect of accounting change 4,440 --
Depreciation and amortization 9,163 10,340
(Gain) on sales of securities (1,544) (1,515)
(Gain) on sales of assets (74) (316)
Others (132) (79)
Changes in operating assets and liabilities--
Receivables 16,720 17,032
Deferred subscription revenue (12,491) (8,751)
Payables and accrued liabilities 3,907 (1,335)
Postretirement benefits 5,674 4,048
Deferred income taxes (164) (2,369)
Deferred selling expenses 468 1,493
Inventories (1,286) (190)
Other assets and liabilities--net 1,218 933
---------------- ---------------
Net cash provided from operating activities 33,845 27,671
---------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures--
Acquisition of a business (net
of $1,293 cash acquired) -- (25,460)
Business purchase price adjustments (753) 241
Capitalized software (2,356) (3,190)
Purchase of equipment and furnishings (956) (3,071)
Building Improvements (66) (615)
Proceeds from sales of property 6 151
---------------- ----------------
Net cash used for capital expenditures (4,125) (31,944)
---------------- ----------------
Securities investments--
Proceeds from sales and maturities 92,770 146,465
Purchases (87,861) (124,756)
---------------- ----------------
Net cash provided from securities investments 4,909 21,709
---------------- ----------------
Net cash provided from (used for)
investing activities 784 (10,235)
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of capital stock to employees 3,981 4,536
Purchases of treasury stock (30,189) (15,398)
Dividends paid (5,487) (5,830)
Repayment of borrowings (4,000) --
Borrowings -- 25,000
---------------- ----------------
Net cash provided from (used for)
financing activities (35,695) 8,308
---------------- ----------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (1,066) 25,744
CASH AND CASH EQUIVALENTS, beginning of period 23,972 16,190
---------------- ----------------
CASH AND CASH EQUIVALENTS, end of period $ 22,906 $ 41,934
================ ================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid $ 4,377 $ 3,863
Income taxes paid 3,017 3,677
ACQUISITION OF A BUSINESS:
Fair value of assets acquired $ 33,447
Cash Paid (26,753)
----------------
Liabilities assumed $ 6,694
================
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THE BUREAU OF NATIONAL AFFAIRS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 7, 2002
(UNAUDITED)
NOTE 1: General
- ----------------
The information in this report has not been audited. Results for the
thirty-six weeks are not necessarily representative of the year because of the
seasonal nature of activities. The financial information furnished herein
reflects all adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair statement of the results
reported for the periods shown and has been prepared in conformity with
accounting principles generally accepted in the United States of America and
applied on a consistent basis.
Notes contained in the 2001 Annual Report to security holders are hereby
incorporated by reference. Note disclosures, which would substantially duplicate
those contained in the 2001 Annual Report to security holders, have been
omitted. Certain prior year balances have been restated to conform to current
year presentation.
The reported amounts of some assets and liabilities, and the disclosures
of contingent assets and liabilities, result from management estimates and
assumptions which are required to prepare financial statements in conformity
with accounting principles generally accepted in the United States of America.
Estimates and assumptions are used for measuring such items as postretirement
benefits, deferred tax assets, the allowance for doubtful accounts, intangible
assets, and goodwill. Estimates and assumptions may also affect the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
NOTE 2: Inventories
- --------------------
Inventories consisted of the following (in thousands):
September December
7, 2002 31, 2001
------------- ------------
Materials and supplies $ 2,108 $ 2,204
Work in process 1,636 358
Finished goods 1,268 1,164
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Totals $ 5,012 $ 3,726
============= ============
NOTE 3: Stockholders' Equity
- ------------------------------
Treasury stock as of September 7, 2002 and December 31, 2001,
respectively, consisted of: Class A, 14,701,393 and 14,365,542 shares; Class B,
6,355,246 and 4,213,038 shares; and Class C, 1,218,855 and 1,095,610 shares.
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NOTE 4: Segment Information
- -----------------------------
In thousands of dollars:
12 Weeks Ended 36 Weeks Ended
9/7/2002 9/8/2001 9/7/2002 9/8/2001
--------------------- ----------------------
Revenues from External Customers:
Publishing $59,130 $59,838 $180,375 $183,320
Printing 4,771 4,091 13,770 14,067
Software 4,555 7,437 12,868 9,882
--------------------- ----------------------
Total $68,456 $71,366 $207,013 $207,269
===================== ======================
Intersegment Printing Revenues $ 3,189 $ 3,161 $ 9,902 $10,514
===================== ======================
Intersegment Software Revenues $ 421 $ 325 $ 1,965 $ 450
===================== ======================
Operating Profit:
Publishing $ 4,842 $ 2,577 $ 17,005 $ 10,409
Printing 353 41 717 205
Software 162 2,300 160 (1,205)
--------------------- ----------------------
Total $ 5,357 $ 4,918 $ 17,882 $ 9,409
===================== ======================
NOTE 5: Subsequent Event
- ------------------------
On September 12, 2002, the Board of Directors declared a dividend of $0.15
per share, payable October 3, 2002, to all holders of shares as of September 22,
2002. The dividend payment will total $5,246,305.
NOTE 6: Goodwill and Intangible Assets
- --------------------------------------
Effective January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and
Other Intangible Assets," which establishes the accounting and financial
reporting standards for acquired goodwill and other intangible assets. Under
SFAS No. 142, goodwill and indefinite-lived intangible assets are no longer
amortized but instead are subject to a transitional test for asset impairment
and annual tests thereafter. The transitional test of the $77 million of
goodwill as of January 1, 2002, resulted in a writedown of $4.4 million; this is
recorded on the income statement as a Cumulative Effect of Accounting Change. If
SFAS No. 142 had been effective in 2001, the 2001 net income and 2001 earnings
per share would have been $10,006,000 and $0.26 for the first three quarters of
the year and $3,942,000 and $0.10 for the third quarter only.
Goodwill assigned to the operating segments is as follows: Publishing
$49,998,000, Printing, $917,000; and Software, $22,840,000. Changes to goodwill
since December 31, 2001, were to reclass $411,000 for assembled workforce from
other intangibles to goodwill as required by SFAS No.142, to reclass and
writeoff $20,000 for a subscription list purchased in 1965, to record a
$1,104,000 business acquisition purchase price adjustment, and to record a
$4,440,000 impairment charge.
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Intangible assets that continue to be subject to amortization as of
September 7, 2002 were as follows (in thousands of dollars):
Gross Carrying Accumulated
Amount Amortization
--------------------------------
Software $ 21,739 $ (7,599)
Copyrights 9,145 (1,691)
Customer Lists 13,846 (4,804)
Other 4,801 (2,230)
--------------------------------
Total $ 49,531 $ (16,324)
================================
Amortization expense for the above assets was $5,613,000 and $5,098,000 for the
first three quarters of 2002 and 2001, respectively.
PART I
Item 2. Management's Discussion and Analysis of Results of
- ------- --------------------------------------------------
Operations and Financial Position
---------------------------------
It is presumed that users of this interim report have read or have access
to the audited financial statements and management's discussion and analysis
contained in the 2001 Annual Report to security holders, hereby incorporated by
reference. This interim report is intended to provide an update of the
disclosures contained in the 2001 Annual Report to security holders and,
accordingly, disclosures, which would substantially duplicate those contained
therein, have been omitted.
Forward-looking Statements
- --------------------------
This management discussion contains and incorporates by reference certain
statements that are not statements of historical fact but are forward-looking
statements. The use of such words as "believes," "expects," "estimates,"
"could," "should," and "will," and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ from those projected.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof.
Results of Operations
- ---------------------
Thirty-six weeks 2002 compared to thirty-six weeks 2001
- -------------------------------------------------------
BNA's consolidated operating profit nearly doubled through the third
quarter of 2002 despite the impact the general economic slowdown has had on
revenues. This was due to substantially improved operating results of all three
operating segments. Excluding the effect of an accounting change, net income and
earnings per share were also sharply higher.
A change in accounting rules for goodwill, effective at the beginning of
2002, eliminated the ongoing amortization expense, but instead required a
transitional test for asset impairment and annual impairment testing thereafter.
The transitional test of the $77 million of goodwill as of January 1, 2002,
resulted in a writedown of $4.4 million; this was recorded on the income
statement as a Cumulative Effect of Accounting Change.
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Consolidated revenues of $207 million were essentially even with those of
the prior year while operating expenses were down 4.4 percent. As a result, the
operating profit rose 90 percent. Excluding the goodwill impairment writedown,
net income was $12.4 million through three quarters of 2002, a 48 percent
improvement over 2001, and earnings per share were $.35 per share, up from $.22.
If the change in goodwill amortization had also been effective in 2001, the
consolidated operating profit increased 52 percent and, excluding the goodwill
impairment writedown, net income was up 24 percent and earnings per share
increased 35 percent.
Publishing segment revenues were down 1.6 percent. Parent and Tax
Management combined subscription and online revenues were essentially flat, as
improvements in the legal and tax product lines were offset by continuing
declines in the human resource and the environment, health & safety product
lines. The Books division and Pike & Fischer recorded modest revenue gains, but
BNA International revenues were down slightly. Revenues remained sharply lower
for Kennedy and IOMA, businesses that are particularly sensitive to the economy.
Publishing operating expenses were down 5.5 percent due to cost reduction
efforts, mainly by the parent, Kennedy, and IOMA, and the change in goodwill
accounting. Excluding goodwill amortization in 2001, the publishing segment
operating profit increased 43 percent.
Printing segment total revenues were down 3.7 percent compared to 2001,
reflecting a 2.1 percent decline in commercial sales and a 5.8 percent decrease
in intersegment revenues. Sales to external customers were affected by the
general economic slowdown, but especially by reduced demand for financial
printing caused by the subdued capital markets. However, sales to new customers
have mitigated the revenue decline. Intersegment revenues are expected to
decline as Publishing segment subscribers continue to migrate from print to
electronic products. Operating expenses were down 5.8 percent, reflecting lower
variable costs and workforce reductions. As a result, the operating profit
improved to $717,000 in 2002 compared to $205,000 in 2001.
Software segment revenues were up sharply this year due to the full
inclusion of STF. STF, which was acquired in April 2001, records most of its
revenues and profits in the first and fourth quarters. STF generated revenues
from external customers of $5.7 million and an operating profit of $3.7 million
in the first thirty-six weeks of this year. STF's 2002 revenues and operating
profit were each improved in the third quarter by $1.3 million due to
non-recurring events, mainly a contract buyout settlement. STF recorded revenues
of $838,000 and an operating loss of $1.5 million (including $855,000 of
goodwill amortization) during the twenty-three weeks that we owned them in 2001.
BNA Software records the majority of its revenues and all of its profits in the
second half of the year. BNA Software revenues were $7.2 million in the first
three quarters of 2002 compared to $9 million last year, reflecting earlier
renewal revenues from product updates shipped in the third quarter of 2001; this
year these products will be shipped in the fourth quarter. BNA Software's
operating expenses increased 22 percent due to higher staffing costs and to
expenses related to a major new product. As a result, BNA Software incurred a
$3.5 million operating loss in 2002, compared to a $288,000 profit in 2001. The
combined software segment had a $160,000 operating profit in 2002 compared to a
$1.2 million loss in 2001. Excluding goodwill amortization, the operating loss
in 2001 was $350,000.
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Investment income and net other income and expense fell $1.9 million due
to a decline in investment income and a gain in 2001 on the sale of a
publication. Interest expense increased $227,000, mainly due to the financing
costs of the STF acquisition. Other comprehensive income and expense reflected
an unrealized holding loss in 2002 compared a gain in 2001.
Twelve weeks ended September 7, 2002 compared to twelve weeks
- -------------------------------------------------------------
ended September 8, 2001
- -----------------------
For the third quarter only, consolidated revenues were down 4.1 percent,
while operating expenses were down 5.0 percent. The revenue and expense factors
mentioned above also affected third quarter comparisons. Excluding goodwill
amortization, operating profit decreased 8.5 percent, net income was down 3.9
percent, but earnings per share increased to $.11 from $.10 due to fewer shares
outstanding. Financial results of the Publishing and the Printing segments
improved significantly. However, the Software segment's comparison suffered due
to the timing of BNA Software's renewal revenues.
Outlook
- -------
At this late date, we are no longer expecting any meaningful financial
boost from a recovering economy this year. Revenue growth continues to be
difficult to achieve in this environment. Fortunately, we have been able to
reduce operating expenses, compensating for the lack of revenue growth and
generating improved profits. We will continue along that track as long as
necessary.
Despite the lack of top-line growth, we are pleased with the financial
results through the first three quarters. The consolidated operating profit and
earnings per share, excluding the goodwill writedown, are well above the weak
2001 comparable figures and close to the 2000 figures, BNA's strongest year. We
believe that 2002 earnings per share could finish the year close to that of
2000.
Financial Position
- ------------------
Cash provided from operating activities was $33.8 million in the first
thirty-six weeks of 2002 compared to $27.7 million for the first thirty-six
weeks of 2001. Customer receipts were down 2.4 percent, but operating
expenditures decreased 6.0 percent from 2001.
Cash provided from investing activities netted to $784,000. Capital
expenditures amounted to $4.1 million, and cash provided from the investment
portfolio was $4.9 million. Cash used for financing activities netted to $35.7
million. Sales of Class A capital stock to employees totaled $4 million.
Repurchases of capital stock, most of which were mandatory tenders, amounted to
$30.2 million. In addition, the Company paid cash dividends of $5.5 million and
repaid borrowings of $4 million.
With over $138 million in cash and investment portfolios and a $5 million
loan facility, the financial position and liquidity of the Company remains very
strong. Since subscription monies are collected in advance, cash flows from
operations, along with existing financial reserves and proceeds from the sales
of capital stock, have been sufficient in past years to meet all operational
needs, new product introductions, debt repayments, most capital expenditures,
and, in addition,
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provide funds for dividend payments and the repurchase of stock tendered by
shareholders. Should more funding become necessary or desirable in the future,
the Company believes that it has sufficient additional debt capacity based on
its operating cash flows and real estate equity.
Item 4. Controls and Procedures
- ------- -----------------------
Within the 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Exchange Act Rule
13a-14. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Company (including its consolidated subsidiaries) required to be
included in the Company's periodic SEC filings. There were no significant
changes in our internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation.
PART II
Item 1. Legal Proceedings
- ------- -----------------
There were no material legal proceedings during the first thirty-six weeks
of 2002.
Item 2. Change in Securities
- ------- --------------------
There were no changes in securities.
Item 3. Defaults upon Senior Securities
- ------- -------------------------------
There were no defaults upon senior securities.
Item 4. Submission of Matters to a Vote of Securities Holders
- ------- -----------------------------------------------------
There were no matters submitted to a vote of security holders.
Item 5. Other Information
- ------- -----------------
No other information is presented herein.
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
No reports were filed on Form 8-K during the quarter ended September 7,
2002.
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SIGNATURES
Pursuant to the requirements 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.
The Bureau of National Affairs, Inc.
Registrant
10/11/2002 /s/Paul N. Wojcik
- ------------------ ----------------------------------
Date Paul N. Wojcik
President and Chief Executive Officer
10/11/2002 /s/George J. Korphage
- ------------------ -----------------------------------
Date George J. Korphage
Vice President and Chief Financial Officer
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CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Paul N. Wojcik, Chief Executive Officer of The Bureau of National Affairs,
Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of The Bureau of National
Affairs, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors:
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
10/11/2002 /s/Paul N. Wojcik
- ------------------ ----------------------------------
Date Paul N. Wojcik
President and Chief Executive Officer
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CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, George J. Korphage, Chief Financial Officer of The Bureau of National
Affairs, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of The Bureau of National
Affairs, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors:
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
10/11/2002 /s/George J. Korphage
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Date George J. Korphage
Vice President and Chief Financial Officer