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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 June 14, 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 ______
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes ___X___ No ______
The number of shares outstanding of each of the issuer's classes of common
stock, as of June 14, 2003 was 15,533,688 Class A common shares, 18,025,299
Class B common shares, and 1,214,116 Class C common shares.
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE 24-WEEKS ENDED JUNE 14, 2003 and JUNE 15, 2002
(Unaudited) (In thousands of dollars,
except per share amounts)
24 Weeks Ended
-------------------------------
June 14, 2003 June 15, 2002
------------- -------------
OPERATING REVENUES $ 135,585 $ 138,557
----------- -----------
OPERATING EXPENSES:
Editorial, production, and distribution 76,558 74,732
Selling 25,233 25,126
General and administrative 26,293 26,174
----------- -----------
TOTAL OPERATING EXPENSES 128,084 126,032
----------- -----------
OPERATING PROFIT 7,501 12,525
----------- -----------
NON-OPERATING INCOME:
Investment income 2,121 3,344
Interest expense (2,664) (2,805)
Other income, net 1 51
----------- -----------
TOTAL NON-OPERATING INCOME (EXPENSE) (542) 590
----------- -----------
INCOME BEFORE INCOME TAXES 6,959 13,115
PROVISION FOR INCOME TAXES 2,383 4,518
----------- -----------
INCOME BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 4,576 8,597
CUMULATIVE EFFECT OF ACCOUNTING CHANGE -- (4,440)
----------- -----------
NET INCOME 4,576 4,157
OTHER COMPREHENSIVE INCOME (EXPENSE) 1,801 (525)
----------- -----------
COMPREHENSIVE INCOME $ 6,377 $ 3,632
=========== ===========
EARNINGS PER SHARE:
INCOME BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE $ .13 $ .24
CUMULATIVE EFFECT OF ACCOUNTING CHANGE -- (.12)
----------- -----------
NET INCOME PER SHARE $ .13 $ .12
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING 34,900,184 36,034,797
=========== ===========
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE 12-WEEKS ENDED JUNE 14, 2003 and JUNE 15, 2002
(Unaudited)
(In thousands of dollars, except per share data)
12 Weeks Ended
-------------------------------
June 14, 2003 June 15, 2002
------------- -------------
OPERATING REVENUES $ 69,725 $ 71,601
----------- -----------
OPERATING EXPENSES:
Editorial, production, and distribution 38,406 37,879
Selling 12,931 12,973
General and administrative 14,687 13,832
----------- -----------
TOTAL OPERATING EXPENSES 66,024 64,684
----------- -----------
OPERATING PROFIT 3,701 6,917
----------- -----------
NON-OPERATING INCOME:
Investment income 1,072 1,302
Interest expense (1,326) (1,369)
Other income, net 1 51
----------- -----------
TOTAL NON-OPERATING INCOME (EXPENSE) (253) (16)
----------- -----------
INCOME BEFORE INCOME TAXES 3,448 6,901
PROVISION FOR INCOME TAXES 1,182 2,435
----------- -----------
NET INCOME 2,266 4,466
OTHER COMPREHENSIVE INCOME (EXPENSE) 1,746 (43)
----------- -----------
COMPREHENSIVE INCOME $ 4,012 $ 4,423
=========== ===========
EARNINGS PER SHARE $ .06 $ .13
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING 34,912,664 35,418,800
=========== ===========
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 14, 2003 AND DECEMBER 31, 2002
(In Thousands of Dollars)
June 14,
2003 December 31,
ASSETS (Unaudited ) 2002
---------------------------------------- ------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 18,488 $ 11,530
Short-term investments, at fair value 36,586 28,241
Receivables (net of allowance for
doubtful accounts of $1,489 in 2003
and $2,016 in 2002) 35,204 42,341
Inventories, at lower of average
cost or market 4,237 3,598
Prepaid expenses 3,967 3,843
Deferred selling expenses 5,178 5,824
Deferred income taxes 7,707 7,447
------------ ------------
Total current assets 111,367 102,824
MARKETABLE SECURITIES 79,012 84,220
PROPERTY AND EQUIPMENT - at cost:
Land 4,250 4,250
Building and improvements 51,568 51,105
Furniture, fixtures, and equipment 48,641 50,801
------------ ------------
104,459 106,156
Less-Accumulated depreciation 72,529 72,947
------------ ------------
Net property and equipment 31,930 33,209
DEFERRED INCOME TAXES 22,392 22,648
GOODWILL 73,852 73,782
INTANGIBLE ASSETS 25,877 30,500
OTHER ASSETS 148 144
------------ ------------
Total assets $ 344,578 $ 347,327
============ ============
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THE BUREAU OF NATIONAL AFFAIRS, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 14, 2003 AND DECEMBER 31, 2002
(In thousands of dollars)
June 14,
2003 December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited ) 2002
----------------------------------------- ------------ ------------
CURRENT LIABILITIES:
Accounts payable $ 11,428 $ 15,482
Employee compensation and
benefits payable 25,815 24,814
Income taxes payable 676 884
Deferred revenues 120,438 126,614
Current portion of long-term debt 5,000 5,000
------------ ------------
Total current liabilities 163,357 172,794
LONG TERM DEBT 75,000 75,000
POSTRETIREMENT BENEFITS, less current portion 68,628 61,460
OTHER LIABILITIES 6,680 6,614
------------ ------------
Total liabilities 313,665 315,868
------------ ------------
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 8,525 5,863
Retained earnings 89,343 90,017
Treasury stock at cost 22,393,442 shares
in 2003 and 22,244,659 in 2002 (124,033) (119,698)
Elements of comprehensive income:
Net unrealized gain (loss) on marketable
securities 29 (1,811)
Foreign currency translation adjustment (118) (79)
------------ ------------
Total stockholders' equity 30,913 31,459
------------ ------------
Total liabilities and stockholders' equity $ 344,578 $ 347,327
============ ============
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CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 24-WEEKS ENDED JUNE 14, 2003 and JUNE 15, 2002
(Unaudited)
(In thousands of dollars)
24 Weeks Ended
-----------------------------
June 14, 2003 June 15, 2002
-----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,576 $ 4,157
Items with different cash requirements than
reflected in net income--
Cumulative effect of accounting change -- 4,440
Depreciation and amortization 8,088 6,119
Gain on sales of securities (500) (999)
Gain on sales of assets (1) (51)
Others (10) (176)
Changes in operating assets and liabilities--
Receivables 10,008 12,238
Deferred revenues (6,176) (6,846)
Payables and accrued liabilities (3,993) (4,384)
Postretirement benefits 8,235 3,728
Deferred income taxes (972) (115)
Deferred selling expenses 646 111
Inventories (639) (296)
Other assets and liabilities--net (123) 736
------------ ------------
Net cash provided from operating activities 19,139 18,662
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures--
Capitalized software (1,370) (1,986)
Purchase of equipment and furnishings (354) (677)
Business purchase price adjustments (447) (681)
Building Improvements (463) (61)
Proceeds from sales of property 2 5
------------ ------------
Net cash used for capital expenditures (2,632) (3,400)
------------ ------------
Securities investments--
Proceeds from sales and maturities 41,970 63,360
Purchases (44,596) (50,607)
------------ ------------
Net cash provided from (used for)
securities investments (2,626) 12,753
------------ ------------
Net cash provided from (used for)
investing activities (5,258) 9,353
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of capital stock to employees 4,085 3,135
Purchases of treasury stock (5,758) (29,154)
Dividends paid (5,250) (5,487)
------------ ------------
Net cash used for financing activities $ (6,923) $ (31,506)
============ ============
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 6,958 (3,491)
CASH AND CASH EQUIVALENTS, beginning of period 11,530 23,972
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 18,488 $ 20,481
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid $ 2,804 $ 3,036
Income taxes paid 3,560 2,888
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THE BUREAU OF NATIONAL AFFAIRS, INC.
Notes to Consolidated Financial Statements
June 14, 2003
(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 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):
June 14, December
2003 31, 2002
-------------- -------------
Materials and supplies $ 2,349 $ 2,108
Work in process 660 277
Finished goods 1,228 1,213
-------------- -------------
Totals $ 4,237 $ 3,598
============== =============
NOTE 3: Stockholders' Equity
Treasury stock as of June 14, 2003 and December 31, 2002, respectively,
consisted of: Class A, 14,466,312 and 14,664,851 shares; Class B, 6,609,566 and
6,350,449 shares; and Class C, 1,317,564 and 1,229,359 shares.
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NOTE 4: Segment Information
In thousands of dollars:
12 Weeks Ended 24 Weeks Ended
6/14/03 6/15/02 6/14/03 6/15/02
---------------------- ----------------------
Revenues from external customers:
Publishing $ 62,797 $ 61,983 $ 121,416 $ 121,245
Printing 4,878 5,302 8,601 8,999
Software 2,050 4,316 5,568 8,313
---------------------- ----------------------
Total $ 69,725 $ 71,601 $ 135,585 $ 138,557
====================== ======================
Intersegment printing revenues $ 2,869 $ 3,428 $ 5,759 $ 6,713
====================== ======================
Intersegment software revenues $ 530 $ 697 $ 1,342 $ 1, 544
====================== ======================
Operating profit:
Publishing $ 5,964 $ 6,169 $ 12,441 $ 12,163
Printing (53) 435 (214) 364
Software (2,210) 313 (4,726) (2)
---------------------- ----------------------
Total $ 3,701 $ 6,917 $ 7,501 $ 12,525
====================== ======================
NOTE 5: Goodwill and Intangible Assets
Goodwill assigned to the operating segments is as follows: Publishing
$49,998,000; Printing $917,000; and Software $22,937,000. Changes to goodwill
since December 31, 2002 were to record $70,000 in net purchase price
adjustments.
Intangible assets that continue to be subject to amortization were as
follows (in thousands of dollars):
June 14, 2003 December 31, 2002
------------------------------- ------------------------------
Gross Carrying Accumulated Gross Carrying Accumulated
Amount Amortization Amount Amortization
------------------------------- ------------------------------
Software $ 23,818 $ (12,098) $ 22,448 $ (8,630)
Customer Lists 14,730 (8,406) 14,730 (7,447)
Copyrights 9,145 (2,394) 9,145 (1,972)
Other 4,801 (3,719) 4,801 (2,575)
------------------------------- ------------------------------
Total $ 52,494 $ (26,617) $ 51,124 $ (20,624)
=============================== ==============================
Amortization expense for the above assets was $5,993,000 (including a $1,803,000
accelerated amortization of a software asset and $617,000 for a publishing
asset) and $3,748,000 in the first two 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
Twenty-four weeks 2003 compared to twenty-four weeks 2002
The weak economic conditions prevalent over the last two years continued into
the first two quarters of 2003. A poor business environment, burdened with
economic and geopolitical uncertainties, continued to negatively affect customer
buying decisions. Nevertheless, BNA's consolidated revenues, exclusive of
Software segment timing differences, held up relatively well, showing only a
small decline for the first two quarters of 2003 compared to 2002. However,
slightly higher operating expenses and a significant decline in investment
income combined to reduce 2003 net income and earnings per share from comparable
2002 levels. Encouragingly, despite the slower start this year, profits are
still close to budget expectations.
Consolidated revenues decreased 2.1 percent to $135.6 million in the first two
quarters of 2003, mostly due to timing differences, while operating expenses
were up 1.6 percent. As a result, the consolidated operating profit was down 40
percent, reflecting lower Software and Printing segment results. Net income was
$4.6 million for the first two quarters, a 47 percent decrease from 2002, and
earnings per share were $.13 per share, down from $.24 per share. Major factors,
as described below, that reduced 2003 net income were an early retirement
program, an asset writedown, timing differences in renewal revenues, and lower
investment income.
Publishing segment revenues were up 0.1 percent compared to the prior year's
first two quarters. Parent and Tax Management combined subscription and online
revenues were up 1.4 percent, due mainly to a sharp increase in royalties
resulting from new contracts with our major online partners. All other
publishing units had lower revenues. Publishing operating expenses in the second
quarter included a one-time $1.6 million net charge for a voluntary early
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retirement program that will help reduce future expenses. All other operating
expenses were down 1.6 percent due to continuing cost reduction efforts. The
Publishing segment's operating profit was $12.4 million, an increase of 2.3
percent for the first two quarters of 2003.
Printing segment total revenues were down 8.6 percent compared to 2002,
reflecting a 4.4 percent decline in commercial sales and a 14.2 percent decrease
in intersegment revenues. Revenues from external customers continue to suffer
from reduced demand for financial printing and from pricing pressures caused by
industry-wide excess capacity. Intersegment revenues are expected to decline as
Publishing segment subscribers continue to migrate from print to electronic
products. Operating expenses were down 5 percent, reflecting lower variable
costs and workforce reductions. The Printing segment's 2003 operating loss was
$214,000 compared to a profit of $364,000 in 2002.
Software segment revenues were down 33 percent compared to 2002 and operating
expenses increased 23.8 percent. BNA Software, which expects to record the
majority of its revenues and all of its profits in the second half of this year,
incurred a 50.3 percent revenue decline due to timing differences. Renewal
revenues are recognized when updates are shipped and the license fee collected.
In 2002, initial renewal revenues from product updates were recorded in the
second quarter; in 2003, this revenue will be recognized in the third quarter.
As previously reported, the carrying value of a BNA Software product was reduced
in the first quarter of 2003 based on lowered sales and cash flow expectations,
resulting in an additional $1.8 million of development cost amortization
expense. Other ongoing expenses declined 6.9 percent due to lower fulfillment
expenses, but BNA Software recorded a $6.2 million operating loss in the first
two quarters of 2003 compared to a $2.6 million loss in the first two quarters
of 2002. STF records most of its revenues and profits in the first and fourth
quarters. STF revenues fell 11.5 percent compared to 2002 due mostly to the loss
of a major customer, and expenses increased 17.4 percent due mainly to higher
staffing costs. As a result, its operating profit dropped to $1.5 million
compared to $2.6 million last year. The total Software segment had a $4.7
million operating loss in the first two quarters of 2003 compared to a $2,000
loss in 2002.
Investment income and net other income fell $1.3 million due to lower investment
balances, lower market yields, and lower realized gains on sales. Interest
expense decreased $141,000, due to lower interest rates and lower outstanding
debt. Other comprehensive income reflected an unrealized holding gain in 2003
compared to a holding loss in 2002.
Twelve weeks ended June 14, 2003 compared to twelve weeks ended June 15,2002.
For the second quarter only, consolidated revenues were off 2.6 percent, while
operating expenses were up 2.1 percent. The revenue and expense factors
mentioned above also affected second quarter comparisons, particularly the
timing of the Software revenues and the Publishing early retirement expense.
Operating profit declined 47 percent, net income was down 49 percent, and
earnings per share were down 54 percent.
Outlook
Revenues are now benefiting from the improved online contract terms negotiated
last year. Barring a major setback, we should soon start to see a strengthening
economy which will improve our revenue growth. Expenses have been cut where
possible consistent with the goal of preserving short-term profits while not
jeopardizing long-term prospects, and that willcontinue. With stimulative
federal monetary and fiscal policies working their way into the economy,
business confidence and spending should improve.
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We expect the second two quarters of the year to be much stronger and fully
reverse the decline in profits experienced thus far. We had budgeted for
improved earnings this year and, despite the slower start, we believe that is
still achievable. Although the anticipated economic recovery will not have as
much positive effect on 2003 earnings as we had previously hoped, we remain
confident that the BNA businesses are well positioned to prosper in a stronger
economy.
FINANCIAL POSITION
Cash provided from operating activities was $19.1 million in the first
twenty-four weeks of 2003, a 2.6 percent increase over the $18.7 million
provided from the first twenty-four weeks of 2002. Customer receipts were down
4.4 percent, but operating expenditures dropped 5.5 percent from 2002.
Cash used for investing activities was $5.2 million. Capital expenditures and
cash used for the investment portfolio were $2.6 million each. Sales of capital
stock to employees totaled $4.1 million and capital stock repurchases amounted
to $5.8 million. The Company paid dividends of $5.2 million.
With over $134 million in cash and investment portfolios and a $5 million loan
facility, the financial position and liquidity of the Company remains 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 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.
12
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PART II
Item 1. Legal Proceedings
- -------
There were no material legal proceedings during the first twenty-four
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
- -------
See form 10-Q for the quarter ended March 22, 2003 for the results of
voting on the Directors' proposals and the election of directors held at
the annual meeting for stockholders on April 19, 2003.
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 June 14, 2003.
13
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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 17,2003 s/Paul N. Wojcik
- ------------- ----------------------------------
Date Paul N. Wojcik
President and Chief Executive Officer
July 17,2003 s/George J. Korphage
- ------------- ---------------------------------
Date George J. Korphage
Vice President and Chief Financial Officer
14
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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.
July 17,2003 s/Paul N. Wojcik
- ------------- ----------------------------------
Date Paul N. Wojcik
President and Chief Executive Officer
15
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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.
July 17,2003 s/George J. Korphage
- ------------- ----------------------------------
Date George J. Korphage
Vice President and Chief Financial Officer