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
OR
( ) Transition Report Pursuant to Section 13 of 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 19, 2004 Commission file number 2-28286
The Bureau of National Affairs, Inc. 53-0040540
A Delaware Corporation (I.R.S. Employer Identification No.)
1231 25th St., N. W., (202) 452-4200
Washington, D.C. 20037 (telephone number)
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).
Indicate by check mark whether the registrant is an accelerated filer is an
accelerated filer (as defined in Rule 12b-2 of the Act). Yes (X).
The number of shares outstanding of each of the issuer's classes of common
stock, as of June 19, 2004 was 14,253,420 Class A common shares, 18,171,784
Class B common shares, and 12,870 Class C common shares.
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE 24-WEEKS ENDED JUNE 19, 2004 and JUNE 14, 2003
(Unaudited)
(In thousands of dollars, except per share amounts)
24 Weeks Ended
June 19, 2004 June 14, 2003
------------ ------------
OPERATING REVENUES $ 139,814 $ 135,585
------------ ------------
OPERATING EXPENSES:
Editorial, production, and distribution 76,927 76,558
Selling 25,846 25,233
General and administrative 25,232 26,293
------------ ------------
TOTAL OPERATING EXPENSES 128,005 128,084
------------ ------------
OPERATING PROFIT 11,809 7,501
------------ ------------
NON-OPERATING INCOME:
Investment income 1,780 2,121
Interest expense (2,591) (2,664)
Other income (expense), net (69) 1
------------ ------------
TOTAL NON-OPERATING (EXPENSE) (880) (542)
------------ ------------
INCOME BEFORE INCOME TAXES 10,929 6,959
PROVISION FOR INCOME TAXES 3,793 2,383
------------ ------------
NET INCOME 7,136 4,576
OTHER COMPREHENSIVE INCOME (EXPENSE) (1,163) 1,801
------------ ------------
COMPREHENSIVE INCOME $ 5,973 $ 6,377
============ ============
NET INCOME PER SHARE $ .22 $ .13
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 32,848,352 34,900,184
============ ============
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE 24-WEEKS ENDED JUNE 19, 2004 and JUNE 14, 2003
(Unaudited)
(In thousands of dollars, except per share amounts)
12 Weeks Ended
June 19, 2004 June 14, 2003
------------ ------------
OPERATING REVENUES $ 69,901 $ 69,725
------------ ------------
OPERATING EXPENSES:
Editorial, production, and distribution 38,157 38,406
Selling 13,077 12,931
General and administrative 12,736 14,687
------------ ------------
TOTAL OPERATING EXPENSES 63,970 66,024
------------ ------------
OPERATING PROFIT 5,931 3,701
------------ ------------
NON-OPERATING INCOME:
Investment income 747 1,072
Interest expense (1,297) (1,326)
Other income (expense), net (54) 1
------------ ------------
TOTAL NON-OPERATING (EXPENSE) (604) (253)
------------ ------------
INCOME BEFORE INCOME TAXES 5,327 3,448
PROVISION FOR INCOME TAXES 1,892 1,182
------------ ------------
NET INCOME 3,435 2,266
OTHER COMPREHENSIVE INCOME (EXPENSE) (1,336) 1,746
------------ ------------
COMPREHENSIVE INCOME $ 2,099 $ 4,012
============ ============
NET INCOME PER SHARE $ .11 $ .06
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 32,513,172 34,912,664
============ ============
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 19, 2004 AND DECEMBER 31, 2003
(In thousands of dollars)
June 19,
2004 December 31,
ASSETS (Unaudited) 2003
- -------------------------------- ------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 17,115 $ 18,488
Short-term investments 15,721 25,450
Receivables (net of allowance for
doubtful accounts of $1,262 in 2004
and $2,135 in 2003) 36,573 40,167
Inventories 4,275 3,802
Prepaid expenses 3,613 4,560
Deferred selling expenses 4,022 4,625
Deferred income taxes 8,394 8,197
------------ ------------
Total current assets 89,713 105,289
MARKETABLE SECURITIES 92,848 80,985
PROPERTY AND EQUIPMENT:
Land 4,250 4,250
Building and improvements 51,698 51,690
Furniture, fixtures and equipment 46,551 49,007
------------ ------------
102,499 104,947
Less-Accumulated depreciation 73,464 74,428
------------ ------------
Net property and equipment 29,035 30,519
DEFERRED INCOME TAXES 25,045 23,368
GOODWILL 73,452 73,852
INTANGIBLE ASSETS 22,792 23,937
OTHER ASSETS 326 239
------------ ------------
Total assets $ 333,211 $ 338,189
============ ============
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 19, 2004 AND DECEMBER 31, 2003
(In thousands of dollars)
June 19,
2004 December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited) 2003
- ------------------------------------ ------------ ------------
CURRENT LIABILITIES:
Accounts payable $ 13,508 $ 15,848
Employee compensation and benefits payable 22,373 25,829
Income taxes payable 2,027 2,053
Deferred revenues 128,020 122,861
Current portion of long-term debt 5,000 5,000
------------ ------------
Total current liabilities 170,928 171,591
LONG-TERM DEBT 70,000 70,000
POSTRETIREMENT BENEFITS, less current portion 72,797 64,302
OTHER LIABILITIES 8,008 7,793
------------ ------------
Total liabilities 321,733 313,686
------------ ------------
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 13,326 11,350
Retained earnings 97,794 95,631
Treasury stock, at cost - 24,728,471 shares
in 2004 and 23,513,748 in 2003 (155,471) (139,470)
Elements of other comprehensive income:
Net unrealized loss on marketable securities (1,174) (17)
Foreign currency translation adjustment (164) (158)
------------ ------------
Total stockholders' equity 11,478 24,503
------------ ------------
Total liabilities and stockholders' equity $ 333,211 $ 338,189
============ ============
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 24-WEEKS ENDED JUNE 19, 2004 and JUNE 14, 2003
(Unaudited)
(In thousands of dollars)
24 Weeks Ended
June 19, 2004 June 14, 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,136 $ 4,576
Items with different cash requirements
than reflected in net income--
Depreciation and amortization 4,982 8,088
Gain on sales of securities (216) (500)
Capitalized interest (174) (68)
Others (276) (11)
Changes in operating assets and liabilities--
Receivables 4,467 10,008
Deferred revenues 5,159 (6,176)
Payables and accrued liabilities (6,283) (3,993)
Postretirement benefits 7,624 8,235
Deferred income taxes (1,248) (972)
Deferred selling expenses 603 646
Inventories (473) (639)
Other assets and liabilities--net 1,091 (123)
------------ ------------
Net cash provided by operating activities 22,392 19,071
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures--
Capitalized software (1,829) (1,302)
Purchase of equipment and furnishings (515) (354)
Business purchase price adjustment 400 (447)
Building improvements (8) (463)
Proceeds from sale of assets 113 2
------------ ------------
Net cash (used for) capital expenditures (1,839) (2,564)
------------ ------------
Securities investments--
Proceeds from sales and maturities 40,465 41,970
Purchases (43,393) (44,596)
------------ ------------
Net cash (used for) securities investments (2,928) (2,626)
------------ ------------
Net cash (used for) investing activities (4,767) (5,190)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of capital stock to employees 3,213 4,085
Purchases of treasury stock (17,238) (5,758)
Dividends paid (4,973) (5,250)
------------ ------------
Net cash (used for)financing activities (18,998) (6,923)
------------ ------------
NET INCREASE(DECREASE) IN
CASH AND CASH EQUIVALENTS (1,373) 6,958
CASH AND CASH EQUIVALENTS, beginning of period 18,488 11,530
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 17,115 $ 18,488
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ 2,789 $ 2,804
Income taxes paid 5,067 3,560
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THE BUREAU OF NATIONAL AFFAIRS, INC.
Notes to Consolidated Financial Statements
June 19, 2004
(Unaudited)
NOTE 1: General
The information in this report has not been audited. Results for the
twenty-four weeks are not necessarily representative of the year because of the
seasonal nature of activities. The financial information furnished herein
reflects all adjustments of a normal, recurring nature that 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 generally accepted
accounting principles of the United States of America applied on a consistent
basis.
Notes contained in the 2003 Annual Report to security holders are hereby
incorporated by reference. Note disclosures which would substantially duplicate
those contained in the 2003 Annual Report to security holders have been omitted.
Certain prior year balances have been reclassified 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):
June 19, December 31,
2004 2003
------------ ------------
Materials and supplies $ 2,112 $ 2,089
Work in process 856 436
Finished goods 1,307 1,277
------------ ------------
Total $ 4,275 $ 3,802
============ ============
NOTE 3: Stockholders' Equity
Treasury stock as of June 19, 2004 and December 31, 2003, respectively,
consisted of: Class A, 15,746,580 and 15,620,011 shares; Class B, 6,463,081 and
5,801,150 shares; and Class C, 2,518,810 and 2,092,587 shares.
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NOTE 4: Segment Information
In thousands of dollars:
12 Weeks Ended 24 Weeks Ended
6/19/04 6/14/03 6/19/04 6/14/03
--------------------- ----------------------
Revenues from external customers:
Publishing $ 61,864 $ 62,797 $ 122,933 $ 121,416
Printing 6,007 4,878 11,099 8,601
Software 2,030 2,050 5,782 5,568
---------------------- ----------------------
Total $ 69,901 $ 69,725 $ 139,814 $ 135,585
====================== ======================
Intersegment printing revenues $ 2,426 $ 2,869 $ 5,243 $ 5,759
====================== ======================
Intersegment software revenues $ 514 $ 530 $ 1,236 $ 342
====================== ======================
Operating profit:
Publishing $ 7,850 $ 5,964 $ 14,265 $ 12,441
Printing (152) (53) (145) (214)
Software (1,767) (2,210) (2,311) (4,726)
---------------------- ----------------------
Total $ 5,931 $ 3,701 $ 11,809 $ 7,501
====================== ======================
NOTE 5: Goodwill and Intangible Assets
Goodwill assigned to the operating segments is as follows: Publishing
$49,998,000; Printing $917,000; and Software $22,537,000. Goodwill was reduced
by $400,000 in 2004 to record a business purchase price adjustment.
Intangible assets that continue to be subject to amortization were as
follows (in thousands of dollars):
June 19, 2004 December 31, 2003
------------------------------- -----------------------------
Gross Carrying Accumulated Gross Carrying Accumulated
Amount Amortization Amount Amortization
------------------------------- -----------------------------
Software $ 27,043 $ (14,540) $ 25,040 $ (13,057)
Customer Lists 14,638 (10,427) 14,638 (9,464)
Copyrights 9,145 (3,309) 9,145 (2,887)
Other 4,816 (4,574) 4,801 (4,279)
------------------------------- -----------------------------
Total $ 55,642 $ (32,850) $ 53,624 $ (29,687)
=============================== =============================
Amortization expense for the above assets for the first two quarters was
$3,163,000 in 2004 and $5,993,000 (including writedowns of $1,803,000 for a
software asset and $617,000 for a publishing asset) in 2003.
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NOTE 6: Employee Benefit Plans
The Company has noncontributory defined benefit pension plans and provides
retiree health care and life insurance benefits (other postretirement benefits)
for certain of its employees. The components of net periodic benefit expenses,
based on the actuarial study as of January 1 for each year, were as follows (in
thousands of dollars):
12 Weeks Ended 24 Weeks Ended
6/19/04 6/14/03 6/19/04 6/14/03
---------------------- ---------------------
Pension Benefits:
Service cost $ 1,626 $ 1,792 $ 3,345 $ 3,218
Interest cost 2,254 2,009 4,561 4,054
Expected return on plan assets (2,043) (1,635) (4,072 (3,250)
Amortization of prior service
cost and of net actuarial loss 286 449 605 611
Voluntary early retirement program -- 1,760 -- 1,760
--------------------- ---------------------
Total expense $ 2,123 $ 4,375 $ 4,439 $ 6,393
===================== =====================
Other Postretirement Benefits:
Service cost $ 1,157 $ 759 $ 2,029 $ 1,476
Interest cost 1,659 1,102 2,892 2,123
Expected return on plan assets (432) (299) (860) (638)
Amortization of prior service
cost and of net actuarial gain 585 (13) 619 (25)
--------------------- ---------------------
Total expense $ 2,969 $ 1,549 $ 4,680 $ 2,936
===================== =====================
The effect of recognizing the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 in the current quarter was to lower the accumulated
pension benefit obligation by $7 million and to lower the Other Postretirement
Benefit expense by $550,000.
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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 2003 Annual Report to security holders, hereby incorporated by reference.
This interim report is intended to provide an update of the disclosures
contained in the 2003 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
Twenty-four weeks ended June 19, 2004 compared to twenty-four weeks
- -------------------------------------------------------------------
ended June 14, 2003.
- --------------------
BNA maintained strong financial results through the two quarters of 2004, easily
exceeding last year's weak start. Each of the three operating segments recorded
higher revenues and improved operating results.
Consolidated revenues increased 3.1 percent to $139.8 million in the first half
of 2004, while operating expenses were down 0.1 percent. As a result, the
consolidated operating profit was up 57 percent to $11.8 million. Net income was
$7.1 million for the first half, a 56 percent increase from 2003. Earnings per
share increased to $.22, up from $.13 per share, due to the improved net income
and fewer outstanding shares. Year-to-year comparisons were favorably affected
by expenses recorded in 2003 for an early retirement program and for a software
asset writedown.
Publishing segment revenues were up 1.2 percent to $122.9 million compared to
the prior year's first half. Parent and Tax Management combined subscription and
online revenues were up 1.3 percent. Legal and tax products continued to
generate respectable revenue gains, while revenues from the other major market
lines continued their declines. Nearly all the publishing units had higher
revenues. Publishing operating expenses in the first half were down 0.3 percent
compared to last year, which had included a $1.6 million net expense for a
voluntary early retirement program. Excluding this one-time 2003 expense,
operating expenses were up 1.2 percent reflecting higher staffing expenses but
lower fulfillment costs. The Publishing segment's operating profit was $14.3
million in 2004 and $12.4 million in 2003. Excluding the one-time expense, the
operating profit was up 1.7 percent for the first half of 2004.
Printing segment total revenues were up 13.8 percent compared to 2003.
Intersegment revenues, expected to decline as Publishing segment subscribers
continue to migrate from print to electronic products, were down 9 percent. But
commercial sales were up 29 percent, despite a very price-sensitive competitive
environment, due mostly to an upturn in financial printing work. Operating
expenses were up 13.1 percent, reflecting higher variable costs. The
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operating loss was $145,000 in 2004 compared to a $214,000 loss in last year's
first two quarters.
Software segment revenues increased 3.8 percent compared to 2003 and operating
expenses decreased 21.4 percent. BNA Software earns the majority of its revenues
and all of its profits in the second half of the year. For the first half,
revenues grew 17.7 percent due mainly to higher sales of BNA Fixed Assets
products and services, while ongoing expenses decreased 1.7 percent due to cost
containment efforts. BNA Software recorded a $3.9 million operating loss in the
first half of 2004; it had a $4.4 million loss in the first half of 2003,
excluding the $1.8 million writedown of capitalized development costs. STF earns
most of its revenues and profits in the first and fourth quarters. STF total
revenues declined 6.4 percent compared to 2003, due to lower intersegment sales
and lower revenues from external customers. Operating expenses decreased 12.2
percent due mainly to lower staffing costs, and STF achieved a 5.8 percent
increase in its operating profit. The total software segment had a $2.3 million
operating loss in 2004 and a $4.7 million loss in 2003. Excluding the asset
writedown, the 2004 first-half loss was $612,000 lower than last year.
Investment income and net other income fell $411,000 due to lower investment
balances, lower market yields, and lower realized gains on sales. Interest
expense decreased $73,000 due to lower interest rates and less debt. Other
comprehensive income reflected an unrealized holding loss in 2004 compared to a
holding gain in 2003.
Twelve weeks ended June 19, 2004 compared to twelve weeks ended June 14, 2003.
- ------------------------------------------------------------------------------
For the second quarter only, consolidated revenues increased 0.3 percent, while
operating expenses decreased 3.1 percent. Operating profit was up 60 percent and
net income was up 52 percent. The revenue and expense factors mentioned above
also affected second quarter comparisons, particularly the prior year's
voluntary early retirement program expense. Excluding the 2003 early retirement
expense, the 2004 operating profit was 12.2 percent higher. Earnings per share
increased to $.11, up from $.06 per share, reflecting the improved net income
and fewer outstanding shares.
Outlook.
- --------
The improved financial results for the first half put us in a good position to
achieve our 2004 profit goals. Revenue growth has been better than expected,
with most business units showing improvement. McArdle and IOMA, who were hit
hard by the weak business economy over the three previous years, have shown the
strongest revenue turnaround. Although consolidated revenue growth has improved,
it is far from robust. The cost controls that have sustained profits over the
last three years are still in place.
Our 2004 budget calls for a 20% increase in operating profit and a 25% increase
in earnings per share. First half results are well ahead of last year and,
encouragingly, they are also tracking above budget. At this point in the year,
we remain very positive about our chances to achieve strong profit growth this
year.
FINANCIAL POSITION
- ------------------
Cash provided from operating activities was $22.4 million in the first
twenty-four weeks of 2004, a 17.4 percent increase over the $19.1 million
provided from the first twenty-four weeks of 2003. Customer receipts were up 9.4
percent, and operating expenditures increased 8.1 percent from 2003. Four
additional business days in the first half of 2004 partially accounted for
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these increases. Cash used for investing activities was $4.8 million. Capital
expenditures netted to $1.9 million and cash used for the investment portfolio
totaled $2.9 million. During the first two quarters, sales of capital stock to
employees totaled $3.2 million. The Company paid dividends of $5.0 million, and
capital stock repurchases amounted to $17.2 million.
With almost $126 million in cash and investment portfolios the financial
position and liquidity of the Company remains very strong. The 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, 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 3. Quantitative and Qualitative Disclosures about Market Risk
- ------- ----------------------------------------------------------
There have been no material changes to our market risk since December 31, 2003.
Item 4. Controls and Procedures
- ------- -----------------------
The Company carried out an evaluation, under the supervision and with the
participation of its management, including the Company's Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the
Securities Exchange Act of 1934), as of the end of the period covered by this
report. Based on this evaluation, the Company's Chief Executive Officer and
Chief Financial Officer have concluded that the Company's disclosure controls
and procedures are effective in timely alerting them to material information the
Company is required to disclose in its periodic SEC filings.
During the period covered by this report there have been no significant changes
in the Company's internal controls over financial reporting that have materially
affected, or were reasonably likely to materially affect, the Company's internal
control over financial reporting.
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PART II
Item 1. Legal Proceedings
- ------- -----------------
There were no material legal proceedings during the first twenty-four weeks
of 2004.
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
- ------- -----------------------------------------------------
See form 10-Q for the quarter ended March 27, 2004 for the results of the
election of directors held at the annual meeting for stockholders on April 17,
2004.
Item 5. Other Information
- ------- -----------------
No other information is presented herein.
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits
31.1 Certification of the Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002, 18 U.S.C. section 1350.
31.2 Certification of the Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002, 18 U.S.C. section 1350.
32.1 Certification of the Chief Executive Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, 18 U.S.C. section 1350.
32.2 Certification of the Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, 18 U.S.C. section 1350.
(b) No reports were filed on Form 8-K during the quarter ended
June 19, 2004.
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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
July 22, 2004 s/Paul N. Wojcik
- ------------------ ----------------------------------
Date Paul N. Wojcik
President and Chief Executive Officer
July 22, 2004 s/George J. Korphage
- ------------------ ---------------------------------
Date George J. Korphage
Vice President and Chief Financial Officer