BUREAU OF NATIONAL AFFAIRS INC - FORM 10-Q

Attached files

file	filename
EX-32 - EXHIBIT32 - BUREAU OF NATIONAL AFFAIRS INC	formexhibit32.htm
EX-31.2 - EXHIBIT31.2 - BUREAU OF NATIONAL AFFAIRS INC	formexhibit31_2.htm
EX-31.1 - EXHIBIT31.1 - BUREAU OF NATIONAL AFFAIRS INC	formexhibit31_1.htm

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

( )	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 11, 2010	Commission file number 2-28286

The Bureau of National Affairs, Inc.


A Delaware Corporation	53-0040540 (I.R.S. Employer Identification No.)

1801 South Bell Street	(703) 341-3000
Arlington, Virginia 22202	(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 such filing requirements for the past 90 days. Yesx No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer x

Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes o No x

The number of shares outstanding of each of the issuer's classes of common stock as of September 18, 2010 was 10,377,919 Class A common shares, 15,456,430 Class B common shares, and 6,450 Class C common shares.

Table of Contents

	TABLE OF CONTENTS


	Part I

Item 1.	Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Statements of Income	3
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and
	Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24
Item 4T.	Controls and Procedures	24

	Part II

Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	(Removed and Reserved)	25
Item 5.	Other Information	25
Item 6.	Exhibits	25

Signatures		26

Exhibit 31.1		27
Exhibit 31.2		28
Exhibit 32		29

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PART I-FINANCIAL INFORMATION

THE BUREAU OF NATIONAL AFFAIRS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE 36 WEEKS ENDED SEPTEMBER 11, 2010 and SEPTEMBER 12, 2009
(Unaudited)
(All dollars in thousands, except per share amounts)


	36 Weeks Ended
	September 11, 2010			September 12, 2009

OPERATING REVENUES	$	222,037		$	224,105

OPERATING EXPENSES:
Editorial, production, and distribution		108,156			121,605
Selling		29,941			36,284
General and administrative		47,331			39,392
Goodwill impairment		6,634			17,805

TOTAL OPERATING EXPENSES		192,062			215,086

OPERATING PROFIT		29,975			9,019

INVESTMENT INCOME		3,373			2,939
INTEREST EXPENSE		(1,281	)		(1,893	)

INCOME BEFORE INCOME TAXES		32,067			10,065
PROVISION FOR INCOME TAXES		15,407			3,309

NET INCOME		16,660			6,756

OTHER COMPREHENSIVE INCOME		64,514			8,244

COMPREHENSIVE INCOME	$	81,174		$	15,000

EARNINGS PER SHARE	$	.64		$	.25

WEIGHTED AVERAGE SHARES OUTSTANDING		25,927,671			27,002,477

See accompanying notes to condensed consolidated financial statements.

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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE 12 WEEKS ENDED SEPTEMBER 11, 2010 and SEPTEMBER 12, 2009
(Unaudited)
(All dollars in thousands, except per share amounts)


	12 Weeks Ended
	September 11, 2010			September 12, 2009

OPERATING REVENUES	$	73,384		$	72,904

OPERATING EXPENSES:
Editorial, production, and distribution		35,166			39,855
Selling		9,552			12,118
General and administrative		14,917			12,959
Goodwill impairment		6,634			17,805

TOTAL OPERATING EXPENSES		66,269			82,737

OPERATING PROFIT (LOSS)		7,115			(9,833	)

INVESTMENT INCOME		1,769			960
INTEREST EXPENSE		(406	)		(629	)

INCOME (LOSS) BEFORE INCOME TAXES		8,478			(9,502	)
PROVISION (BENEFIT) FOR INCOME TAXES		6,780			(3,581	)

NET INCOME (LOSS)		1,698			(5,921	)

OTHER COMPREHENSIVE (LOSS) INCOME		(386	)		3,924

COMPREHENSIVE INCOME (LOSS)	$	1,312		$	(1,997	)

EARNINGS (LOSS) PER SHARE	$	.07		$	(.22	)

WEIGHTED AVERAGE SHARES OUTSTANDING		25,679,050			26,528,919

See accompanying notes to condensed consolidated financial statements.

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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 11, 2010 and DECEMBER 31, 2009

(In thousands of dollars)


	(Unaudited)
	September 11,		December 31,
ASSETS	2010		2009

CURRENT ASSETS:
Cash and cash equivalents	$	34,504	$	9,757
Short-term investments		19,554		14,445
Receivables (net of allowance for doubtful accounts of
$890 at September 11, 2010 and $1,556 at Dec. 31, 2009)		26,514		32,604
Inventories		2,306		2,935
Prepaid expenses		5,097		3,739
Deferred income taxes		5,424		5,652

Total current assets		93,399		69,132

MARKETABLE SECURITIES		93,648		95,305

PROPERTY AND EQUIPMENT:
Land		23,642		23,642
Building and improvements		96,060		95,939
Furniture, fixtures and equipment		47,148		46,734

		166,850		166,315
Less-Accumulated depreciation		55,519		51,279

Net property and equipment		111,331		115,036

DEFERRED INCOME TAXES		10,289		51,601

GOODWILL		37,100		44,962

INTANGIBLE AND OTHER ASSETS		10,545		7,231

INVESTMENT IN AFFLIATED COMPANY		---		4,163

Total assets	$	356,312	$	387,430

See accompanying notes to condensed consolidated financial statements.

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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 11, 2010 and DECEMBER 31, 2009

(In thousands of dollars)


	(Unaudited)
	September 11,			December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	2010			2009

CURRENT LIABILITIES:
Current portion of long-term debt	$	20,500		$	10,500
Payables and accrued liabilities		11,732			16,906
Employee compensation and benefits payable		22,052			17,994
Income taxes payable		9,820			3,706
Dividends payable		5,943			---
Deferred revenues		131,596			125,378

Total current liabilities		201,643			174,484

LONG-TERM DEBT, less current portion		---			13,000

POSTRETIREMENT BENEFITS, less current portion		106,046			210,533

OTHER LIABILITIES		862			1,381

Total liabilities		308,551			399,398

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):
Common stock issued, $1.00 par value—
Class A - 30,000,000 shares		30,000			30,000
Class B - 24,634,865 shares		24,635			24,635
Class C - 2,531,680 shares		2,532			2,532
Additional paid-in capital		50,072			47,511
Retained earnings		229,610			224,406
Treasury stock, at cost — 31,541,353 shares at
September 11, 2010 and 30,913,320 at Dec. 31, 2009		(290,299	)		(277,749	)
Accumulated other comprehensive income (loss):
Net unrealized gain on marketable securities		1,870			1,366
Foreign currency translation adjustment		(118	)		(129	)
Postretirement benefits adjustment		(541	)		(64,540	)

Total stockholders' equity (deficit)		47,761			(11,968	)

Total liabilities and stockholders' equity (deficit)	$	356,312		$	387,430

See accompanying notes to condensed consolidated financial statements.

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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 36 WEEKS ENDED SEPTEMBER 11, 2010 and SEPTEMBER 12, 2009
(Unaudited)
(In thousands of dollars)

	36 Weeks Ended
	September 11, 2010			September 12, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	16,660		$	6,756
Adjustments to reconcile net income to net
cash provided by operating activities—
Goodwill impairment		6,634			17,805
Depreciation and amortization		6,805			6,996
Deferred income taxes		(1,570	)		(10,795	)
Gain on sales of securities		(1,055	)		(197	)
Others		493			(128	)
Changes in operating assets and liabilities—
Receivables		6,813			14,786
Deferred revenues		6,754			(11,397	)
Payables and accrued liabilities		4,243			379
Postretirement benefits		3,267			4,394
Inventories		629			(387	)
Other assets and liabilities—net		(1,762	)		(440	)

Net cash provided by operating activities		47,911			27,772

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of assets		---			31
Acquisition of business (net of $56 cash acquired in 2010)		(565	)		(3,200	)
Purchase of property and equipment		(789	)		(760	)
Capitalized software		(1,558	)		(1,118	)
Acquisition of publishing assets		---			(917	)
Investment securities sales and maturities		36,864			37,875
Investment securities purchases		(39,653	)		(27,949	)

Net cash (used in) provided by investing activities		(5,701	)		3,962

CASH FLOWS FROM FINANCING ACTIVITIES:
Receipts for capital stock sales to employees		5,816			5,855
Purchases of treasury stock		(14,766	)		(23,796	)
Payment of long-term debt		(3,000	)		(3,000	)
Dividends paid		(5,513	)		(5,519	)

Net cash used in financing activities		(17,463	)		(26,460	)

NET INCREASE IN CASH AND CASH EQUIVALENTS		24,747			5,274

CASH AND CASH EQUIVALENTS, beginning of period		9,757			11,139

CASH AND CASH EQUIVALENTS, end of period	$	34,504		$	16,413

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid	$	1,296		$	2,028
Income taxes paid		10,858			9,364

See accompanying notes to condensed consolidated financial statements.

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THE BUREAU OF NATIONAL AFFAIRS, INC.

Notes to Condensed Consolidated Financial Statements

September 11, 2010

(Unaudited)

NOTE 1: General

The primary business of The Bureau of National Affairs, Inc. (BNA, or the “Company”) is the publishing of legal, regulatory, and general business advisory information in labor, economic, tax, health care, environment and safety, consulting, recruiting, and other markets to business, professional, and academic users, mainly in the United States.

BNA also provides printing services to customers in the mid-Atlantic region through its McArdle Printing Co., Inc. subsidiary. The Company’s software businesses develop, produce, and market tax and financial planning software and electronic tax forms for U.S. customers.

The Company’s financial reporting is based on 13 four-week periods. There are three periods (twelve weeks) in each of the first three fiscal quarters and four periods in the fourth fiscal quarter. The information in this report has not been audited. Results for the twelve and 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 generally accepted accounting principles of the United States of America applied on a consistent basis.

These financial statements should be read in conjunction with the Notes to Consolidated Financial Statements contained in the Company’s 2009 Annual Report on Form 10-K. Note disclosures which would substantially duplicate those contained in the 2009 Annual Report on Form 10-K have been omitted. Certain prior year balances have been reclassified to conform to the current year presentation.

The reported amounts of certain 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, and the allowance for doubtful accounts, and for evaluating the possible impairment of intangible assets and goodwill. Accordingly, estimates and assumptions may also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Company has evaluated subsequent events after the balance sheet date through the date the financial statements were issued and did not note any events other than those disclosed in Note 2 that would require disclosure.

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NOTE 2: Subsequent Event

On September 23, 2010, BNA Subsidiaries, LLC (“Subsidiaries”) filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court in the District of Delaware (the “Bankruptcy Court”). Subsidiaries was formed in 2008 by the merger and reorganization of the former Kennedy Information, Inc. and Institute of Management and Administration, Inc (IOMA). Subsidiaries has been particularly hard hit by the recession that began in 2008, including two staples of its business, newsletters and webinars, which saw precipitous drops in revenue, participants and subscriber counts, and operating losses. Despite aggressive restructuring efforts, Subsidiaries continued to suffer losses and incur expenses that were beyond its ability to self fund. Such operating losses and expenses were historically funded by BNA; however, BNA informed Subsidiaries that it was no longer willing to fund Subsidiaries’ losses on an unsecured basis. As a result, Subsidiaries decided to continue the reorganization by voluntarily filing for relief under Chapter 11 of the Bankruptcy Code and, in connection therewith, BNA offered and Subsidiaries accepted Debtor-in-Possession (DIP) financing after trying to secure borrowings on more favorable terms from other lenders.

Under the Bankruptcy Code order approving the DIP financing provided to Subsidiaries by BNA, BNA’s loan is secured by a first priority lien. Subsidiaries intends to submit to the Bankruptcy Court a plan of reorganization that will allow it to emerge from bankruptcy and continue as a viable going concern. As part of that plan of reorganization, Subsidiaries will restructure its debts and pre-petition obligations in an effort to emerge as a viable company. In that regard, it is presently expected that BNA will not receive any value on account of its present equity interest in Subsidiaries. There is however, no assurance that a plan of reorganization will be approved by the Bankruptcy Court or that Subsidiaries will be able to emerge from the Bankruptcy case. In the event that Subsidiaries does not reorganize and liquidates its businesses and assets, the first liens that secure the DIP financing would entitle BNA to receive payment, after certain court, legal and other fees incurred as part of the Bankruptcy cases, but before all the other creditors of Subsidiaries.

In light of the current situation, BNA has determined that the remaining goodwill on its books relating to BNA Subsidiaries, LLC can no longer be supported and is therefore taking a write-down of the goodwill to zero. This will amount to a non-cash charge of $6,634,000 in the third quarter (see Note 7).

NOTE 3: Acquisition

During the first quarter of 2009, the Company invested $3.2 million in preferred stock of Llesiant, Inc., a technology partner. Llesiant is developing the taxonomy-based search engine used by “BNA Convergence,” a delivery platform designed for the legal and corporate markets that allows searching of all BNA content along with a large collection of third-party content. The investment was recorded as a long-term investment. During the fourth quarter of 2009, the Company increased its long-term investment by $0.8 million. Also during the fourth quarter, the Company purchased 42 percent of the outstanding common stock for $0.3 million and began to recognize its percentage interest in Llesiant’s loss using the equity method of accounting ($137,000 at year-end 2009). During the first quarter of 2010, the Company made additional investments of $0.3 million, recognized a further equity-method loss of $67,000, and then purchased the remaining outstanding common stock for $0.3 million on February 12, 2010.

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The following table summarizes the consideration paid and the amounts of the assets acquired and the liabilities assumed recognized at the acquisition date (in thousands of dollars):

Consideration:

Cash	$	4,921

Recognized amounts of identifiable assets
acquired and liabilities assumed:

Identifiable intangible assets	$	3,084
Deferred taxes		953
Goodwill		1,079
Receivables and other		137
Cash		56
Payables		(432	)
Deferred revenue		(160	)
Total identifiable net assets		4,717
Equity loss recognized prior to acquisition		204
Total	$	4,921

The fair value of the acquired identifiable intangible assets is provisional pending receipt of the final valuations for those assets.

NOTE 4: Revenues and Deferred Revenues

The Company derives revenues from publishing and software product sales and from printing and other services. Revenues are recognized when all of the following criteria are met: there is persuasive evidence that an arrangement exists; delivery has occurred or services have been rendered; the price to the customer is fixed and determinable; and collectibility is reasonably assured.

The majority of publishing sales are by subscription, primarily for one year. Subscription revenues are deferred and amortized over the subscription terms. The Company also licenses information content to certain online service providers for access by their customers. Revenues from these licenses are recognized on either a transactional or subscription basis. Revenues from other publishing products, such as books, research reports, and special reports, are recognized when the products are shipped, net of a reserve for returns when the right of return exists.

Revenues from printing services are recognized when the materials are shipped. Revenues from consulting, software data conversion, and training are recognized when the services have been completed. Revenues from event-related activities, such as conferences, are recognized when the event has been completed.

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Software revenues are recognized in accordance with Accounting Standards Codification 985-605, Software—Revenue Recognition (ASC 985-605, formerly AICPA Statement of Position 97-2, Software Revenue Recognition). The majority of software sales are bundled arrangements which include a one-year software program license term and post-sale support, including telephone support and program updates (when and if available) during the license term. Revenues are deferred and recognized ratably over the license and post-sale support term. However, when the sale includes a specified upgrade (a specific future program enhancement promised to customers) revenue is deferred until that specified upgrade is delivered. Revenues from sales of software products with updates provided periodically over a license term, typically one year, are recognized ratably over the license terms.

Deferred revenues at the end of the third quarter of 2010 consisted of $113.7 million of deferred subscription revenues and $17.9 million of deferred software revenues. Deferred revenues at the end of 2009 consisted of $109.1 million of deferred subscription revenues and $16.3 million of deferred software revenues.

NOTE 5: Inventories

Inventories consisted of the following (in thousands of dollars):

	September 11, 2010		December 31, 2009
Materials and supplies	$	1,129	$	1,511
Work in process		434		476
Finished goods		743		948

Total	$	2,306	$	2,935

NOTE 6: Intangible and Other Assets and Goodwill

Intangible and other amortizable assets were as follows (in thousands of dollars):

	September 11, 2010					December 31, 2009
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Software	$	29,930	$	(21,606	)	$	26,319	$	(21,247	)
Customer Lists		6,136		(5,232	)		6,182		(5,017	)
Copyrights		9,145		(9,007	)		9,145		(8,374	)
Other		209		(137	)		214		(123	)

Total	$	45,420	$	(35,982	)	$	41,860	$	(34,761	)

Amortization expense for the above assets was $2,272,000and $2,270,000, respectively, in the first three quarters of 2010 and 2009. During the first three quarters of 2010, gross intangible and other amortizable assets of $4,641,000 were added and $1,081,000 were written down. Other assets (non-amortizable) amounted to $1,107,000 and $132,000 at September 11, 2010 and December 31, 2009, respectively.

NOTE 7: Goodwill

The carrying amount of goodwill is subject to testing on an annual basis or, if events or circumstances indicate that an impairment is more likely than not to have occurred, on an interim basis. Impairment testing is done at the reporting unit level. The fair value of each reporting unit is determined using a multiple of earnings before interest, taxes, depreciation and amortization (EBITDA). Any excess in the carrying value of the reporting units over their fair value is an indication of a potential goodwill impairment, which would require further analysis to measure the amount of the impairment expense, if any.

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Due to the filing under Chapter 11 by BNA Subsidiaries, LLC (see Note 2), the Company performed an interim test as of September 11, 2010. The carrying value of a publishing segment reporting unit, the IOMA division of BNA Subsidiaries, LLC, was found to be less than its fair value. As a result, a goodwill impairment expense of $6,634,000 was recorded for the third quarter of 2010.

Goodwill assigned to the reportable segments and the changes in the carrying amount of goodwill for the first three quarters of 2010 are as follows (in thousands of dollars):

	Publishing			Printing		Software		Total

Balance, January 1, 2010	$	21,594		$	917	$	22,451	$	44,962
Impairment loss		(6,634	)		---		---		(6,634	)
Goodwill acquired during year		1,079			---		---		1,079
Goodwill written off related to sale of
publications		(2,307	)		---		---		(2,307	)

Balance, September 11, 2010	$	13,732		$	917	$	22,451	$	37,100

NOTE 8: 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 net periodic benefit expense is based on estimated values provided by third party actuaries.

The components of net periodic benefit expense were as follows (in thousands of dollars):

	12 Weeks Ended						36 Weeks Ended
	09/11/10			09/12/09			09/11/10			09/12/09
Pension Benefits:
Service cost	$	1,915		$	1,854		$	5,744		$	5,562
Interest cost		3,136			3,020			9,407			9,060
Expected return on plan assets		(3,651	)		(3,062	)		(10,961	)		(9,187	)
Amortization of prior service cost
and net actuarial loss		736			1,164			2,209			3,492

Total	$	2,136		$	2,976		$	6,399		$	8,927

Other Postretirement Benefits:
Service cost	$	584		$	1,493		$	2,569		$	4,479
Interest cost		1,041			2,533			4,323			7,598
Expected return on plan assets		(307	)		(323	)		(933	)		(968	)
Amortization of prior service cost
and net actuarial loss		(2,022	)		938			(3,899	)		2,816

Total	$	(704	)	$	4,641		$	2,060		$	13,925

Pension plan contributions were $15 million in 2009 and $2 million in 2010, contributed during the first three quarters of each year.

During the first quarter, the Company substantially changed the postretirement health benefits for Medicare-eligible retirees of the Parent, from providing self-insured health care benefits to providing a fixed annual stipend to be used to offset health insurance purchased by the retiree. The change was substantial enough to require a remeasurement of the obligation, and resulted in a $109 million reduction in the postretirement benefit obligation, a $65 million increase to accumulated other comprehensive income and a $44 million decrease in deferred income taxes. Other postretirement benefit expense will be substantially lower for the remainder of 2010 and for future years.

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NOTE 9: Segment Information

In thousands of dollars:

12 Weeks Ended:	Total Operating Revenues		Intersegment Operating Revenues		External Operating Revenues		Operating Profit (Loss)
September 11, 2010
Publishing (a)	$	62,026	$	---	$	62,026	$	5,028
Printing		6,595		2,088		4,507		(362	)
Software		7,408		557		6,851		2,449

Total	$	76,029	$	2,645	$	73,384	$	7,115


September 12, 2009
Publishing (b)	$	62,248	$	---	$	62,248	$	(11,257	)
Printing		6,762		2,437		4,325		(87	)
Software		6,906		575		6,331		1,511

Total	$	75,916	$	3,012	$	72,904	$	(9,833	)

36 Weeks Ended:	Total Operating Revenues		Intersegment Operating Revenues		External Operating Revenues		Operating Profit (Loss)
September 11, 2010
Publishing (a)	$	185,851	$	---	$	185,851	$	22,239
Printing		21,002		6,580		14,422		(588	)
Software		23,445		1,681		21,764		8,324

Total	$	230,298	$	8,261	$	222,037	$	29,975


September 12, 2009
Publishing (b)	$	189,316	$	---	$	189,316	$	2,918
Printing		22,193		7,296		14,897		277
Software		21,606		1,714		19,892		5,824

Total	$	233,115	$	9,010	$	224,105	$	9,019

(a) Operating profit includes a goodwill impairment of $6,634.

(b) Operating profit includes a goodwill impairment of $17,805.

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NOTE 10: Stockholders' Equity (Deficit)

There is no established public trading market for any of BNA's three classes of common stock. However, employees may purchase the Company’s Class A common stock through its Stock Purchase and Transfer Plan and the BNA 401(k) Plan (the “Plans”). Semi-annually, the Board of Directors establishes the price at which shares can be bought or sold and declares dividends. In 2010, dividends of $.23 per share were declared in September and $.21 per share were declared in March. In 2009, dividends of $.21 per share were declared in September and $.20 per share were declared in March.

Treasury stock as of September 11, 2010 and December 31, 2009, respectively, consisted of: Class A, 19,814,966 and 19,270,041 shares; Class B, 9,201,157 and 9,118,049 shares; and Class C, 2,525,230 and 2,525,230 shares. As of September 11, 2010, authorized shares of Class A, Class B, and Class C shares were 30,000,000, 30,000,000, and 5,000,000, respectively.

The Company’s stockholders, when selling stock, are required to first tender shares to the Company. The Company has supported the continuance of employee ownership through its practice of repurchasing stock tendered by stockholders, but it is not required to do so. Capital stock with a market value of $3.0 million as of September 11, 2010 is known or expected to be tendered during the next twelve months. The actual amount likely will be higher.

NOTE 11: Commitments, Contingencies, and Related-Party Transactions

In July 2010, the Company signed a contractual agreement to sell its Rockville, Maryland subscriber relations facility for $18-$19 million to a local developer. The pretax gain on the sale is projected to be approximately $16 million after closing and related costs. The transaction is expected to be completed no later than early 2012. Most of the employees at the facility are being relocated in November 2010 to 32,000 square feet of leased office space in Bethesda, Maryland. The Company signed a ten-year lease for that space in July 2010 for approximately $1 million per year.

The Company is involved in certain legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the consolidated financial statements. The Company indemnifies certain of its customers for potential copyright infringement lawsuits related to the use of its products. Any exposure related to these indemnifications is believed to be remote.

A director of one of the Company's subsidiaries is a shareholder of a law firm that provides the subsidiary with editorial services. Fees incurred for these services were $1,304,000 in the third quarter of 2010 and $1,320,000 in the third quarter of 2009 and $3,983,000 and $4,007,000 in the first three quarters of 2010 and 2009, respectively.

NOTE 12: Fair Value Measurements

The Company values its assets and liabilities using the methods of fair value as described in Accounting Standards Codification 820, Fair Value Measurements and Disclosures (ASC 820, formerly FASB Statement of Financial Accounting Standards No. 157, Fair Value Measurements). ASC 820 discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels:

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Level 1:

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:

Inputs, other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3:

Unobservable inputs that reflect the reporting entity’s own assumptions.

Financial assets carried at fair value measured on a recurring basis as of September 11, 2010 and the necessary disclosures are as follows (in thousands of dollars):

	Balance as of		Fair Value Measures at 09/11/10 Using Fair Value Hierarchy						Fair Value as of
	09/11/10		Level 1		Level 2		Level 3		09/11/10
Cash and cash equivalents	$	34,504	$	34,504		---		---	$	34,504
Short-term investments		19,554		19,554		---		---		19,554
Marketable securities		93,648		93,648		---		---		93,648

Total	$	147,706	$	147,706		---		---	$	147,706

Financial assets carried at fair value measured on a recurring basis as of December 31, 2009 and the necessary disclosures are as follows (in thousands of dollars):

	Balance as of		Fair Value Measures at 12/31/09 Using Fair Value Hierarchy						Fair Value as of
	12/31/09		Level 1		Level 2		Level 3		12/31/09
Cash and cash equivalents	$	9,757	$	9,757		---		---	$	9,757
Short-term investments		14,445		14,445		---		---		14,445
Marketable securities		95,305		95,305		---		---		95,305

Total	$	119,507	$	119,507		---		---	$	119,507

The fair values of short-term investments and marketable securities are based on quoted market prices from various stock and bond exchanges. The Company chose not to elect the fair value option as prescribed by ASC 820 (formerly FASB Statement of Financial Accounting Standards No. 159, The Fair Value Option For Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115) for its financial assets and liabilities that had not been previously carried at fair value. Therefore, material financial assets and liabilities not carried at fair value, such as long-term debt, accounts payable, and customer receivables, are reported at their carrying values. At the end of the third quarter, long-term debt with a carrying value of $20,500,000 had a fair value of $21,147,205. The fair value of long-term debt is based on quotes for like instruments with similar credit ratings and terms.

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Assets carried at fair value measured on a nonrecurring basis as of September 11, 2010 and the necessary disclosures are as follows (in thousands of dollars):

	Balance as of		Fair Value Measures at 09/11/10 Using Fair Value Hierarchy						Total Gains
	09/11/10		Level 1		Level 2		Level 3		(Losses)
Goodwill	$	---		---		---		---	$	(6,634	)

Total	$	---		---		---		---	$	(6,634	)

Assets carried at fair value measured on a nonrecurring basis as of December 31, 2009 and the necessary disclosures are as follows (in thousands of dollars):

	Balance as of		Fair Value Measures at 12/31/09 Using Fair Value Hierarchy						Total Gains
	12/31/09		Level 1		Level 2		Level 3		(Losses)
Goodwill	$	---		---		---		---	$	(17,805	)

Total	$	---		---		---		---	$	(17,805	)

In accordance with Accounting Standards Codification 350-20, Goodwill (ASC 350-20, formerly FASB Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets), at the end of the tird quarter, goodwill with a carrying value of $6,634,000 was written down to its implied fair value of $0, resulting in an impairment charge of $6,634,000, which was included in earnings for the period. See Note 7.

NOTE 13: Investments

Proceeds from the sales and maturities of securities for the first three quarters of 2010 were $36,864,000. Gross realized gains and (losses) from these sales were $1,063,000 and $(8,000). For the third quarter of 2010 only, proceeds from the sales and maturities of securities were $18,302,000 and gross realized gains and (losses) from these sales were $972,000 and $(8,000). Proceeds from the sales and maturities of securities for the first three quarters of 2009 were $37,875,000. Gross realized gains and (losses) from these sales were $399,000 and $(202,000). For the third quarter of 2009 only, proceeds from the sales and maturities of securities were $6,865,000 and gross realized gains and (losses) from these sales were $87,000 and $(19,000). The specific identification method is used in computing realized gains and losses.

The Company's investment securities are classified as available-for-sale and are reported at their fair values (quoted market price), which were as follows (in thousands of dollars):


				Gross			Gross
	Amortized			Unrealized			Unrealized				Fair
September 11, 2010	Cost			Gains			Losses				Value

Equity securities		$	19,474		$	215		$	(1,049	)		$	18,640
Municipal bonds			89,006			3,729			(54	)			92,681
Corporate debt			1,845			36			---				1,881

Total		$	110,325		$	3,980		$	(1,103	)		$	113,202

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			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2009	Cost		Gains		Losses			Value

Equity securities	$	18,122	$	430	$	(1,498	)		$	17,054
Municipal bonds		88,150		3,237		(102	)			91,285
Corporate debt		1,376		35		---				1,411

Total	$	107,648	$	3,702	$	(1,600	)		$	109,750

The following table summarizes investments with gross unrealized losses by the length of time those investments have been continuously in a loss position ( in thousands of dollars):

				Gross Unrealized Losses
	Fair			Less than				More than
September 11, 2010	Value			12 months				12 Months

Equity securities		$	11,131		$	(1	)		$	(1,048	)
Municipal bonds			1,209			---				(54	)

Total		$	12,340		$	(1	)		$	(1,102	)

				Gross Unrealized Losses
	Fair			Less than				More than
December 31, 2009	Value			12 months				12 Months

Equity securities		$	14,582		$	---			$	(1,498	)
Municipal bonds			4,270			(5	)			(97	)

Total		$	18,852		$	(5	)		$	(1,595	)

Each quarter, the Company reviews investment securities that have unrealized losses to determine if those losses are other than temporary. Consideration is given to the credit quality and maturities of the fixed income securities, the financial condition and near-term prospects of the issuers of the equity securities, general market conditions, the length of time and extent to which fair values have been below amortized cost, and the Company’s ability and intent to hold the security to allow for anticipated recovery. If a decline in fair value is determined to be other than temporary, an impairment charge is recorded and a new cost basis in the security is established. Accordingly, the Company wrote down to fair market value equity security investments that were determined to be other than temporarily impaired in 2009. The write downs amounted to $50,000 in the first three quarters of 2009 and are included in investment income in the consolidated statements of income. At September 11, 2010, 10 securities had an aggregated unrealized loss of 8.2 percent from their amortized cost. At December 31, 2009, 17 securities had an aggregated unrealized loss of 7.8 percent from their amortized cost. These securities were reviewed in accordance with the criteria noted above, and their declines in fair value were determined to be not other than temporary.

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Fair values of the Company's fixed-income securities are inversely affected by changes in market interest rates. Generally, the longer the maturity of fixed income securities, the larger the exposure to the risks and rewards resulting from changes in market interest rates. Contractual maturities of the fixed income securities as of September 11, 2010 were as follows (in thousands of dollars):

	Amortized		Fair
	Cost		Value

Within one year	$	19,474	$	19,797
One through five years		16,110		16,974
Five through ten years		12,517		13,405
Over ten years		41,144		42,748
No fixed maturity date		1,606		1,638

Total	$	90,851	$	94,562

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PART I

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read along with the unaudited consolidated financial statements included in this Form 10-Q, as well as the Company’s 2009 Annual Report on Form 10-K, which provides a more thorough discussion of the Company’s business and operations. This interim report is intended to provide an update of the disclosures contained in the 2009 Annual Report on Form 10-K and, accordingly, disclosures which would substantially duplicate those contained therein have been omitted.

Forward-Looking Statements

This management discussion contains 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,” “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.

Overview

BNA operates in three business segments: publishing, printing, and software. The publishing segment, which generated 84 percent of consolidated 2009 revenues, provides legal, regulatory, and general business advisory information in tax, labor, economic, health care, environment and safety, consulting, and other markets to business, professional, government, and academic users. Sales are made principally through field sales representatives. The printing segment provides services to primarily mid-Atlantic area customers, including the BNA publishing segment, other publishers, financial institutions, trade associations, professional societies, educational and other nonprofit organizations, and governmental organizations. The software segment provides tax and financial planning software to accountants, lawyers, tax and financial planners, government agencies, corporations, and others. BNA’s ongoing success is dependent upon: the quality of its products and services; its highly trained and experienced employees; its key relationships with suppliers; and the customers’ need for ongoing information regarding changes and insights in legal, regulatory, tax, and business practices and trends.

In addition to ongoing efforts to improve and provide more product offerings and to operate more efficiently, BNA has been engaged in several multi-year strategic initiatives related to its major publishing activities.

Electronic products now make up 74 percent of the legal and regulatory subscription base. Their migration to a next-generation web platform is now complete. Having all BNA products on one robust platform creates the opportunity to create new bundled products, sell into new markets, and enhance existing product offerings with tools and applications that will attract new customers and better retain existing ones. In addition, subsidiary company products are being moved to the next generation web platform improving corporate-wide efficiency and increasing our flexibility to combine and customize product offerings for new or more specialized markets.

BNA’s high quality, proprietary content remains a competitive strength. But the continued expansion and improvement of our web platform has enabled us to enhance the value of that content and improve the sustainability of our offerings. By concentrating on improving and exploiting our web platform, and on creating new functionalities and tools to work with our highly regarded content, BNA has moved beyond being a content provider and has positioned itself as a technologically adept provider of information solutions to professional markets.

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Pursuant to this strategy, early this year, BNA acquired the remaining interest that it did not already own in Llesiant, a software company that had been working with BNA to create “BNA Convergence”, a new search and delivery tool designed for the legal and corporate markets. This new tool allows law firms to search all their BNA content along with a large collection of third-party content, using Llesiant’s taxonomy–based search engine. Results can be delivered in an increasing variety of formats. Having full control of Llesiant gives BNA the ability to direct the future development and enhancement of its technology to ensure that it best serves BNA’s strategic needs.

BNA’s market-leading news services are also being continually improved, with a major upgrade affecting all of our current awareness services released in the first quarter of 2010. This upgrade included a new “Search My BNA” function that allows, for the first time, subscribers to search all of the BNA services they subscribe to with a single search. Most BNA notification services have now adopted a “continual publishing” model, where news stories are posted online throughout the publication cycle, often minutes after the news breaks.

Using all of BNA’s new capabilities, the Company has successfully launched the first of a series of “next generation” web libraries for the legal market. These comprehensive “Resource Centers” focus on specific substantive practice areas and provide subject matter experts with a one-stop resource that includes all the primary and secondary information, news, analysis, and tools needed to serve their clients.

The Labor and Employment Law Resource Center was launched August, 2010. The product features a more convenient, user-friendly format and integrates legal news products with existing Labor and Employment Law Library research tools. Customers can now search across all relevant databases, including: case law, with headnotes and classification outline searching; law, regulations and agency documents; editorial analysis, BNA treatises, and practice tools; and industry-leading news services, including BNA’s Daily Labor Report.

The Intellectual Property Law Resource Center was launched September, 2010. Utilizing the same design and functionality as the other resource centers, this product integrates the Intellectual Property Library with BNA’s flagship Patent, Trademark & Copyright Journal, and the World Intellectual Property Report. The easy-to-use Resource Center organizes its contents into four unique practice areas: Patent Law, Copyright Law, Trademark & Unfair Trade Practice Law, and Judicial Practice and Procedure. Additional Resource Centers in additional legal practice areas are slated to launch through 2011.

In the tax area, BNA’s new Premier State Tax Library was launched September, 2010. The library includes new practitioner-written analysis, a state tax research digest, and enhanced practice tools, including chart builders, a new monitor, and a rate finder.

In an effort to leverage BNA’s strong tax brands, the Company has expanded its presence in the tax training business. In 2008, BNA International (BNAI) acquired European American Tax Institute (EATI), which provides professional training for international tax professionals. This business was integrated into BNAI, where it complements the Company’s growing portfolio of services for the international tax market. In mid-2009, BNA acquired the assets of the Council for International Tax Education, Inc. (CITE) and the Alliance for Tax, Legal, and Accounting Seminars (ATLAS), both based in White Plains, New York. The firms (now combined and branded as BNA CITE) are leaders in the creation and delivery of international tax education for multinational companies, offering live instruction courses for legal and tax professionals and financial executives.

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BNA pursues a web platform-neutral policy in its information content offerings, allowing customers to choose their format preference. BNA's products have been available for transactional access on the major legal online services—Lexis and Westlaw—for many years. BNA also sells subscriptions to subject libraries of BNA content on these networks, and these have been very popular with major law firms and law schools. In addition, BNA sells subscriptions to its tax products on Thomson Reuters’ Checkpoint platform and Wolters Kluwer’s IntelliConnect platform. These networks and others, in addition to BNA's own online platform and print, CD’s, and DVD’s provide customers with a variety of product delivery options.

The economic downturn that began in the second half of 2008 had a disproportionately negative effect on several of BNA Subsidiaries, LLC’s IOMA and Kennedy brand product lines. Markets for information and meetings for corporate recruiters, and publications of all types aimed at functional departments in corporations, were particularly depressed. Consequently, BNA Subsidiaries, LLC's management began conducting a comprehensive review of its business operations and strategic alternatives, and in 2009, BNA Subsidiaries, LLC adopted and began to implement a strategic restructuring plan. As part of this plan, BNA Subsidiaries, LLC has discontinued, transferred or sold several products and product lines in an effort to create a more focused and profitable company that serves vertical industry markets with high quality information services. Furthermore, BNA Subsidiaries, LLC made numerous facility and employment changes in New Hampshire and New Jersey, as a result of which, most of BNA Subsidiaries, LLC’s operating functions will be consolidated in New Hampshire during 2010. Notwithstanding the implementation of the strategic restructuring plan, BNA Subsidiaries, LLC continues to experience financial losses and continues to incur expenses that are beyond its ability to self fund. Such operating losses have historically been funded by the parent company. After the parent company informed BNA Subsidiaries, LLC that it was no longer willing to continue to fund BNA Subsidiaries, LLC operations with unsecured loans, the BNA Subsidiaries, LLC Board of Directors decided to continue the reorganization by voluntarily filing for relief under Chapter 11 of the Bankruptcy Code. BNA Subsidiaries, LLC expects to file a plan of reorganization, supported by the parent company, in the fourth quarter of 2010. In the third quarter of 2010, the Company recognized a goodwill impairment loss, as discussed in Note 7.

As we face the task of continuing BNA’s success, external factors remain a major concern. The economic environment has improved in general, but key markets, such as large law firms, will continue to restore spending at a slow pace. In the second half of 2009, all of our primary markets stabilized, and in 2010, all are showing signs of recovery. Because of BNA’s subscription-based business model, market improvements are not immediately reflected in revenue.

A second significant factor affecting the business is the rapidly expanding expense related to BNA’s postretirement benefits obligations. Management took a number of major steps in 2009 and in early 2010 to address this issue in a way that would continue to provide BNA’s current retirees with superior benefits without endangering BNA’s future success. The beneficial effects of these changes have begun to be reflected in 2010’s financial performance.

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Results of Operations

Segment Information (in thousands of dollars)

	12 Weeks Ended						36 Weeks Ended
	9/11/2010 (a)			9/12/2009 (b)			9/11/2010 (a)			9/12/2009 (b)
Revenues from external customers:
Publishing	$	62,026		$	62,248		$	185,851		$	189,316
Printing		4,507			4,325			14,422			14,897
Software		6,851			6,331			21,764			19,892

Total	$	73,384		$	72,904		$	222,037		$	224,105

Intersegment printing revenues	$	2,088		$	2,437		$	6,580		$	7,296

Intersegment software revenues	$	557		$	575		$	1,681		$	1,714

Operating Profit:
Publishing	$	5,028		$	(11,257	)	$	22,239		$	2,918
Printing		(362	)		(87	)		(588	)		277
Software		2,449			1,511			8,324			5,824

Total	$	7,115		$	(9,833	)	$	29,975		$	9,019

(a) Publishing operating profit includes a goodwill impairment of $6,634.

(b) Publishing operating profit includes a goodwill impairment of $17,805.

Thirty-six weeks 2010 compared to thirty-six weeks 2009

BNA parent and Tax Management revenues are ahead of last year at the end of the third quarter, but that, along with growth in the software segment, was not enough to overcome revenue declines in other businesses. As a result, consolidated revenue still trails last year. Profits, however, remain well ahead of 2009.

For the first three quarters of 2010, consolidated revenues were $222.0 million, down 0.9 percent compared to 2009. Software segment revenues were up 8.5 percent, but publishing and printing segment revenues were both down. Consolidated operating expenses were down 10.8 percent compared to 2009 mainly due to lower postretirement benefit expenses and to a lower goodwill impairment expense. Net income was $16.7 million in 2010 compared to $6.8 million in 2009, and earnings per share were $.64 in 2010 versus $.25 in 2009.

Publishing segment revenues were down $3.5 million, or 1.8 percent compared to the prior year. BNA Parent and Tax Management subscription, training, and royalty revenues were up 2.4 percent in the first three quarters of 2010. Subscription revenue is improving, but was lower due to slower sales over the past year and due to the effect of one fewer calendar day in the first quarter (subscription revenue is recognized on a daily basis). Training and third party online royalty revenues were up, leading to the increase. BNA Books, BNA International, and BNA Subsidiaries, LLC revenues were all down. Beginning in 2010, certain Parent administrative expenses, primarily IT-related, are no longer being allocated and have resulted in a noticeable change in the makeup of reported operating expenses. However, in total, publishing operating expenses were down 12.3 percent due to lower staffing expenses, especially postretirement benefit plan expenses (see Note 8), and lower goodwill impairment expense ($6.6 million versus $17.8 million, respectively for 2010 and 2009). Operating profit increased to $22.2 million, from $2.9 million in 2009.

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Adverse business conditions resulting from the economic downturn has disproportionately impacted BNA Subsidiaries, LLC, leading to negative cash flows that are expected to continue. After the quarter ended, BNA Subsidiaries, LLC filed for relief under Chapter 11 of the Bankruptcy Code. Related to the filing, the remaining goodwill was tested and determined to be impaired, resulting in its writedown.

Printing segment revenues were down 5.4 percent compared to 2009. Commercial sales were down 3.2 percent due to lower print volumes, and intersegment revenues were down 9.8 percent. Operating expenses were down 1.5 percent, reflecting aggressive steps taken to adjust expenses to lower revenues. The operating loss was $0.6 million in the first three quarters of 2010, compared to an operating profit of $0.3 million in 2009

Total revenues for the software segment (which combines the operations of STF Services Corporation and BNA Software, a division of Tax Management, Inc.) increased 8.5 percent compared to 2009, while expenses were down 4.2 percent. BNA Software revenues increased 10.1 percent in the first three quarters of 2010, operating expenses (especially postretirement benefits) were down 4.1 percent, and operating profit was $6.2 million in 2010 compared to $3.9 million in the same period of 2009. STF revenues were up 1.6 percent and operating expenses were down 4.5 percent, leading to a 9.0 percent increase in operating profit. The total software segment’s operating profit increased 43 percent to $8.3 million in 2010.

Investment income increased, reflecting higher gains on sales of securities but lower yields. Interest expense was lower due to lower term debt balances. Other comprehensive income reflected a higher unrealized holding gain in 2010 and the after-tax change in the postretirement benefit obligation related to the change in benefits as described in Note 8.

Twelve weeks 2010 compared to twelve weeks 2009

For the third quarter only, consolidated revenues increased 0.7 percent. Publishing segment revenues were down 0.4 percent, reflecting improvements for BNA and TM, but declines for the other publishing businesses. Software segment revenues were up 7.3 percent, reflecting higher revenues for BNA Software, while printing segment revenues were down 2.5 percent. Operating expenses benefited from lower postretirement benefit expenses and a lower goodwill impairment writeoff and in total were down 20.0 percent. The Company recorded an operating profit of $7.1 million in the third quarter of 2010 compared to a $9.8 million operating loss in 2009. Earnings (loss) per share for the quarter were $.07 in 2010 and $(.22) in 2009.

Outlook

Better new sales and renewals for BNA and Tax Management subscription services are beginning to be reflected in revenue improvements, and that trend is expected to continue through the fourth quarter. Software segment performance should also remain strong. Non-subscription products, such as books, special reports and conferences, remain weak, and printing, while disappointing, seems to have stabilized. Markets are still challenging, but slow improvement is expected.

Profit comparisons are very favorable compared to last year and will continue to be as far as the beneficial effect of changes made early in the year to the Company’s postretirement benefits and improving revenue trends are reflected in results.

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Financial Position

Cash operating expenditures were down 5.8 percent, but customer cash receipts were up 3.8 percent, leading cash provided from operating activities to increase 73 percent in the first three quarters of 2010 to $47.9 million. Cash used in investing activities was $5.7 million. Purchase of other long-term investments amounted to $0.6 million, net capital expenditures were $2.3 million, and net cash used for securities investments totaled $2.8 million. Cash used in financing activities netted to $17.5 million. Capital stock repurchases were $14.8 million, and receipts for sales of capital stock to employees totaled $5.8 million. Debt principal repayments amounted to $3.0 million and the Company paid cash dividends of $5.5 million.

With over $147 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, pension contributions, 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

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in market risk since December 31, 2009.

Item 4T.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, the Company conducted an evaluation, under the supervision and with the participation of its management, including the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), 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). Based on this evaluation, the CEO and CFO have found such controls to be effective as of September 11, 2010 to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods required by the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting. There were no changes in the Company’s internal control over financial reporting during the quarter ended September 11, 2010 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

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PART II Other Information

Item 1.

Legal Proceedings

There were no material legal proceedings.

Item 1A.

Risk Factors

There were no material changes from the risk factors as previously disclosed in Item 1A of Part I of the Company’s 2009 Annual Report on Form 10-K.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

During the twelve weeks ended September 11, 2010, the Company purchased shares of its common stock, as noted in the table below. The Company is not engaged in share repurchases related to a publicly announced plan or program.

Four-week Period	Total Number of Shares Purchased	Average Price Paid per Share

June 20, 2010-July 17, 2010	32,462	$16.00
July 18, 2010-August 14, 2010	49,274	$16.00
August 15, 2010-September 11, 2010	28,573	$16.00

Item 3.

Defaults Upon Senior Securities

There were no defaults upon senior securities.

Item 4.

(Removed and Reserved)

Item 5.

Other Information

No other information is presented herein.

Item 6.

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	Certification of the CEO and CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. section 1350.

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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

October 22, 2010		s/Paul N. Wojcik
Date		Paul N. Wojcik
		Chairman and Chief Executive Officer

October 22, 2010		s/Robert P. Ambrosini
Date		Robert P. Ambrosini
		Vice President and Chief Financial Officer

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BUREAU OF NATIONAL AFFAIRS INC - FORM 10-Q - October 22, 2010

Attached files

BUREAU OF NATIONAL AFFAIRS INC Reports