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 period ended March 22, 2003 Commission file number 2-28286
The Bureau of National Affairs, Inc.
A Delaware Corporation 53-0040540
(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___ No ______
The number of shares outstanding of each of the issuer's classes of common
stock, as of March 22, 2003 was 15,487,802 Class A common shares, 18,279,571
Class B common shares, and 1,226,161 Class C common shares.
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE 12-WEEKS ENDED MARCH 22, 2003 and MARCH 23, 2002
(Unaudited)
(In thousands of dollars, except per share amounts)
12 Weeks Ended
March 22, 2003 March 23, 2002
-------------- --------------
OPERATING REVENUES $ 65,860 $ 66,956
----------- -----------
OPERATING EXPENSES:
Editorial, production, and distribution 38,152 36,853
Selling 12,302 12,153
General and administrative 11,606 12,342
----------- -----------
62,060 61,348
----------- -----------
OPERATING PROFIT 3,800 5,608
----------- -----------
NON-OPERATING INCOME:
Investment income 1,049 2,042
Interest expense (1,338) (1,436)
----------- -----------
TOTAL NON-OPERATING INCOME (289) 606
----------- -----------
INCOME BEFORE INCOME TAXES 3,511 6,214
PROVISION FOR INCOME TAXES 1,201 2,083
----------- ------------
INCOME BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 2,310 4,131
CUMULATIVE EFFECT OF ACCOUNTING CHANGE --- (4,440)
----------- -----------
NET INCOME 2,310 (309)
OTHER COMPREHENSIVE INCOME (LOSS) 55 (482)
----------- -----------
COMPREHENSIVE INCOME $ 2,365 $ (791)
=========== ===========
EARNINGS PER SHARE:
INCOME BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE $ .07 $ .11
CUMULATIVE EFFECT OF ACCOUNTING CHANGE --- (.12)
----------- -----------
NET INCOME PER SHARE $ .07 $ (.01)
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING 34,911,042 36,787,098
=========== ===========
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 22, 2003 AND DECEMBER 31, 2002
(In thousands of dollars)
March 22,
2003 December 31,
ASSETS (Unaudited ) 2002
---------------------------------------- ------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 24,415 $ 11,530
Short-term investments, at fair value 30,877 28,241
Receivables (net of allowance for
doubtful accounts of $1,471 in 2003
and $2,016 in 2002) 30,900 42,341
Inventories, at lower of average
cost or market 4,383 3,598
Prepaid expenses 3,004 3,843
Deferred selling expenses 5,514 5,824
Deferred income taxes 7,575 7,447
------------ ------------
Total current assets 106,668 102,824
------------ ------------
MARKETABLE SECURITIES 83,272 84,220
------------ ------------
PROPERTY AND EQUIPMENT - at cost:
Land 4,250 4,250
Building and improvements 51,443 51,105
Furniture, fixtures and equipment 50,925 50,801
------------ ------------
106,618 106,156
Less-Accumulated depreciation 73,980 72,947
------------ ------------
Net property and equipment 32,638 33,209
------------ ------------
DEFERRED INCOME TAXES 23,226 22,648
------------ ------------
GOODWILL 73,911 73,782
------------ ------------
INTANGIBLE ASSETS 27,504 30,500
------------ ------------
OTHER ASSETS 149 144
------------ ------------
Total assets $ 347,368 $ 347,327
============ ============
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 22, 2003 AND DECEMBER 31, 2002
(In thousands of dollars)
March 22,
2003 December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited ) 2002
---------------------------------------- ------------ ------------
CURRENT LIABILITIES:
Accounts payable $ 11,759 $ 15,482
Employee compensation and
benefits payable 24,284 24,814
Income taxes payable 2,123 884
Deferred subscription revenue 123,895 126,614
Current portion of long-term debt 5,000 5,000
Dividends payable 5,250 --
------------ ------------
Total current liabilities 172,311 172,794
LONG-TERM DEBT 75,000 75,000
POSTRETIREMENT BENEFITS, less current portion 64,087 61,460
OTHER LIABILITIES 6,645 6,614
------------ ------------
Total liabilities 318,043 315,868
------------ ------------
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 7,152 5,863
Retained earnings 87,077 90,017
Treasury stock, at cost - 22,173,011 shares
in 2003 and 22,244,659 in 2002 (120,236) (119,698)
Elements of other comprehensive income:
Net unrealized loss on marketable securities (1,784) (1,811)
Foreign currency translation adjustment (51) (79)
------------ ------------
Total stockholders' equity 29,325 31,459
------------ ------------
Total liabilities and stockholders' equity $ 347,368 $ 347,327
============ ============
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 12-WEEKS ENDED MARCH 22, 2003 and MARCH 23, 2002
(Unaudited)
(In thousands of dollars)
12 Weeks Ended
March 22, 2003 March 23, 2002
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,310 $ (309)
Items with different cash requirements than
reflected in net income--
Cumulative effect of accounting change -- 4,440
Depreciation and amortization 4,689 3,066
(Gain) on sales of securities (240) (811)
Others (261) (456)
Changes in operating assets and liabilities--
Receivables 11,985 13,068
Deferred subscription revenue (2,719) (2,755)
Payables and accrued liabilities (2,881) (6,304)
Postretirement benefits 2,821 1,869
Deferred income taxes (735) (261)
Deferred selling expenses 310 63
Inventories (785) --
Other assets and liabilities--net 907 1,038
-------------- --------------
Net cash provided from operating activities 15,401 12,648
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures--
Capitalized software (660) (411)
Purchase of equipment and furnishings (462) (454)
Proceeds from sale of publication -- --
Business purchase price adjustment (506) --
-------------- --------------
Net cash used for capital expenditures (1,628) (865)
-------------- --------------
Securities investments--
Proceeds from sales and maturities 26,139 37,936
Purchases (27,778) (3,708)
-------------- --------------
Net cash (used for) provided from
securities investments (1,639) 34,228
-------------- --------------
Net cash (used for) provided from
investing activities (3,267) 33,363
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of capital stock to employees 2,001 1,151
Purchases of treasury stock (1,250) (9,883)
-------------- --------------
Net cash provided from (used for)
financing activities 751 (8,732)
-------------- --------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 12,885 37,279
CASH AND CASH EQUIVALENTS, beginning of period 11,530 21,017
-------------- --------------
CASH AND CASH EQUIVALENTS, end of period $ 24,415 $ 58,296
============== ==============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ 1,485 $ 1,496
Income taxes paid 689 531
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THE BUREAU OF NATIONAL AFFAIRS, INC.
Notes to Consolidated Financial Statements
March 22, 2003
(Unaudited)
NOTE 1: General
- ------- -------
The information in this report has not been audited. Results for the
twelve 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.
Notes contained in the 2002 Annual Report to security holders are hereby
incorporated by reference. Note disclosures which would substantially duplicate
those contained in the 2002 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):
March 22, December
2003 31, 2002
------------- -------------
Materials and supplies $ 2,421 $ 2,108
Work in process 709 277
Finished goods 1,253 1,213
------------- -------------
Totals $ 4,383 $ 3,598
============= =============
NOTE 3: Stockholders' Equity
- ------- --------------------
Treasury stock as of March 22, 2003 and December 31, 2002, respectively,
consisted of: Class A, 14,512,198 and 14,664,851 shares; Class B, 6,355,294 and
6,350,449 shares; and Class C, 1,305,519 and 1,229,359 shares.
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NOTE 4: Segment Information
- ------- -------------------
In thousands of dollars:
12 Weeks Ended
3/22/03 3/23/02
------------- -------------
Revenues from external customers:
Publishing $ 58,619 $ 59,262
Printing 3,723 3,697
Software 3,518 3,997
------------- -------------
Total 65,860 66,956
============= =============
Intersegment printing revenues $ 2,890 $ 3,285
============= =============
Intersegment software revenues $ 812 $ 847
============= =============
Operating profit:
Publishing $ 6,477 $ 5,994
Printing (161) (71)
Software (2,516) (315)
------------- -------------
Total $ 3,800 $ 5,608
============= =============
NOTE 5: Goodwill and Intangible Assets
- ------- ------------------------------
Goodwill assigned to the operating segments is as follows: Publishing
$49,998,000; Printing $917,000; and Software $22,996,000. Changes to goodwill
since December 31, 2002 were to record a $129,000 purchase price adjustment.
Intangible assets that continue to be subject to amortization were as
follows (in thousands of dollars):
March 22, 2003 December 31, 2002
------------------------------ ------------------------------
Gross Carrying Accumulated Gross Carrying Accumulated
Amount Amortization Amount Amortization
------------------------------ ------------------------------
Software $ 23,108 $ (11,326) $ 22,448 $ (8,630)
Customer Lists 14,730 (7,932) 14,730 (7,447)
Copyrights 9,145 (2,183) 9,145 (1,972)
Other 4,801 (2,839) 4,801 (2,575)
------------------------------ ------------------------------
Total $ 51,784 $ (24,280) $ 51,124 $ (20,624)
============================== ==============================
Amortization expense for the above assets was $3,656,000 (including an
additional $1,803,000 accelerated amortization of a software asset) and
$1,881,000 in the first quarters of 2003 and 2002, respectively.
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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 2002 Annual Report to security holders, hereby incorporated by
reference. This interim report is intended to provide an update of the
disclosures contained in the 2002 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
Twelve weeks 2003 compared to twelve weeks 2002
The weak economic conditions prevalent over the last two years continued into
the first quarter of 2003. A poor business environment, burdened with economic
and geopolitical uncertainties, continued to negatively affect customer buying
decisions. Nevertheless, BNA's consolidated revenues held up relatively well,
showing only a small decline for the first quarter of 2003 compared to 2002.
However, slightly higher operating expenses and a significant decline in
investment income combined to reduce first quarter 2003 net income and earnings
per share from comparable 2002 levels. Encouragingly, despite the slower start
this year, profits are not far off of budget expectations.
Consolidated revenues were down 1.6 percent to $65.9 million in the first
quarter of 2003, compared to 2002, reflecting declines in the Publishing and
Software segments. Cost-containment efforts pared ongoing operating expenses 1.5
percent. But a Software asset writedown expense converted an otherwise small
decline in the consolidated operating profit into a 32.2 percent drop, compared
to last year's strong first quarter. Non-operating income was down $895,000 in
the quarter. Net income for the first quarter was $2.3 million, a 44.1 percent
decrease from comparative 2002 results. Earnings per share were $.07 for the
quarter, versus a comparable $.11 in 2002.
Publishing segment revenues declined 1.1 percent compared to the prior year's
first quarter as most of the segment's companies recorded slight declines. Legal
and tax product lines continued to record modest growth, but other product lines
continued to incur declines. Publishing operating expenses were down 2.1 percent
due to continuing cost reduction efforts. Overall, operating profit for the
Publishing segment increased 8.1 percent for the first quarter.
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Printing segment total revenues were down 5.3 percent compared to 2002.
Intersegment revenues declined 12 percent, but commercial sales were up slightly
despite a very price-sensitive competitive environment. Intersegment revenues
are expected to decline as Publishing segment subscribers continue to migrate
from print to electronic product. Operating expenses were down 4 percent,
reflecting lower variable costs. The operating loss was $161,000 in 2003
compared to $71,000 in 2002 in last year's first quarter.
Software segment total revenues were down 12 percent compared to 2002 and
expenses increased 39.9 percent. BNA Software, which records the majority of its
revenues and substantially all of its profits in the second half of the year,
grew revenues 3.8 percent and reduced ongoing expenses 11.1 percent due to lower
product development and fulfillment expenses. However, the carrying value of a
BNA Software product was reduced, based on lowered sales and cash flow
expectations, resulting in an additional $1.8 million of development cost
amortization expense. Consequently, BNA Software recorded a $3.9 million
operating loss in the first quarter of 2003 compared to a $2.6 million loss in
the first quarter of 2002. STF records most of its revenues and profits in the
first and fourth quarters. STF revenues fell 15.1 percent compared to 2002 due
to the loss of a major customer, and expenses increased due mainly to higher
staffing costs. As a result, its operating profit dropped to $1.4 million
compared to $2.3 million last year. The total software segment had a $2.5
million operating loss in 2003 compared to a $315,000 loss in 2002.
Investment and other income fell nearly $1 million due to lower investment
balances, lower market yields, and lower realized gains on sales. Interest
expense decreased $98,000, mainly due to the lower outstanding debt. Other
comprehensive income reflected a small, unrealized holding gain in 2003 compared
to a holding loss in 2002.
Outlook
During this prolonged period of economic slowdown, reportedly the longest since
WW II, our goal has been to preserve cash profits. This has largely been
accomplished despite continuing investments in new products, in publishing and
business systems, and in the enhanced security of our networks and facilities.
Expenses have been cut where possible consistent with the goal of preserving
short-term profits while not jeopardizing long-term prospects. In short, we are
managing through until better times. And, it's reasonable to believe that better
times aren't far away. With the Iraq war seemingly over, business confidence and
spending should improve, leading to a stronger economy and better revenue growth
for our businesses.
We have budgeted for improved earnings this year and, despite the slower start,
we believe that is achievable. Although the timing and strength of an economic
recovery and its effect on 2003 earnings are unknown, we remain confident that
the BNA businesses are well positioned to prosper in a stronger economy.
FINANCIAL POSITION
Cash provided from operating activities was $15.4 million in the first twelve
weeks of 2003, a 21.8 percent increase over the $12.6 million provided from the
first twelve weeks of 2002. Customer receipts were down 2.6 percent, but
operating expenditures decreased 7.5 percent from 2002. Cash used for investing
activities was $3.2 million. Capital expenditures amounted to $1.6 million and
cash used for the investment portfolio totaled $1.6 million. During the quarter,
sales of capital stock to employees totaled $2 million. Capital stock
repurchases amounted to $1.3 million.
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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, 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 twelve weeks
of 2003.
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
- ------- -----------------------------------------------------
The annual meeting for stockholders was held April 19, 2003. A proxy
statement pursuant to Rule 14a was distributed to all stockholders in
connection with this meeting.
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Results of the election of directors:
Stockholder Candidates:
Nominee Shares Voted For
------------------------------------------------------
William A. Beltz 8,351,860
Cynthia J. Bolbach 7,919,674
Eunice L. Bumgardner 6,489,305
Sandra C. Degler 7,121,276
David L. Foster 5,960,429
Neil R. Froemming 7,002,253
George J. Korphage 9,116,874
Gregory C. McCaffery 8,597,469
David P. McFarland 6,640,108
Robert L. Velte 6,709,783
Paul N. Wojcik 9,251,411
Richard H. Cornfield 5,797,187
John E. Jenc 5,436,305
Non-stockholder Candidates
Nominee Shares Voted For
------------------------------------------------------
Gerald S. Hobbs 7,735,662
Jonathan Newcomb 8,294,781
Ellen Taus 8,482,638
Daniel W. Toohey 7,922,811
Proposed Resolution One: "Employee Seat" on the Board of Directors
For 3,739,345
Against 9,567,580
Abstain 268,182
Proposed Resolution Two: President as a Member of the Board of Directors
For 3,520,065
Against 9,857,448
Abstain 197,594
Proposed Resolution Three: Valuation and Sale of the Company
For 2,956,594
Against 10,495,979
Abstain 122,534
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
March 22, 2003.
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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
April 24,2003 s/Paul N. Wojcik
- --------------- ----------------------------------
Date Paul N. Wojcik
President and Chief Executive Officer
April 24,2003 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.
April 24,2003 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.
April 24,2003 s/George J. Korphage
- --------------- ----------------------------------
Date George J. Korphage
Vice President and Chief Financial Officer