**UNITED            STATES SECURITIES AND EXCHANGE            COMMISSION**

**WASHINGTON,            D.C. 20549**

**FORM            10-K**

**(Mark          One)**

| **(X)** | **ANNUAL                    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                    SECURITIES EXCHANGE ACT OF 1934** |
|---------|--------------------------------------------------------------------------------------------------------------------------------|

**OR**

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

| **For                    the fiscal year ended December 31,                    2005** | **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)                                 |

**Securities          Registered pursuant to Section 12(b) of the Act:**

**Securities          registered pursuant to Section 12(g) of the Act**

----

**DOCUMENTS        INCORPORATED BY REFERENCE**

| The                  Bureau of National Affairs, Inc.        |
|--------------------------------------------------------------|
| **Index                  to Form 10-K**                      |
| For                  the fiscal year ended December 31, 2005 |
|                                                         |   |   |
| .                                                            |   | Page                  No. |
|                                                         | PART                  I. |   |
| Item                  1.                                     | Business |  3 |
| Item                  1A.                | Risk                Factors |  4 |
| Item                1B.                                      | Unresolved                Staff Comments |  5 |
| Item                  2.                                     | Properties | 5 |
| Item                  3.                                     | Legal                  Proceedings | 5 |
| Item                  4.                                     | Submission                  of Matters to a Vote of Security Holders  | 6 |
| Item                  X.                                     | Executive                  Officers of the Registrant  | 6 |
|                                                         |   |   |
|                                                         | PART                  II. |   |
| Item                  5.                                     | Market                  for the Registrant's Common Stock and Related Security |   |
|                                                         | Holder                  Matters | 7 |
| Item                  6.                                | Selected                  Financial Data and Selected Quarterly Data. | 8 |
| Item                  7.                                | Management's                  Discussion and Analysis of Financial Condition and |   |
|                                                         | Results                  of Operations | 10 |
| Item7a                                                  | Quantitative                  and Qualitative Disclosures About Market Risk | 14 |
| Item                  8.                                | Financial                  Statements and Supplementary Data | 15 |
| Item                  9.                                | Changes                  in and Disagreements with Accountants on Accounting |   |
|                                                         | and                  Financial Disclosure | 40 |
| Item                  9a.                               | Controls                  and Procedures | 40 |
| Item                  9b.                               | Other                  Information | 40 |
|                                                         |   |   |
|                                                         | PART                  III. |   |
| Item                  10.                               | Directors                  and Executive Officers of Registrant | 41 |
| Item                  11.                               | Executive                  Compensation | 41 |
| Item                  12.                               | Security                  Ownership of Beneficial Owners and Management | 41 |
| Item                  13.                               | Certain                  Relationships and Related Transactions | 41 |
| Item                  14.                               | Principal                  Accounting Fees and Services | 41 |
|                                                         |   |   |
|                                                         | PART                  IV. |   |
| Item                  15.                               | Exhibits,                  Financial Statement Schedules, and Report on Form 8-K | 42 |
|                                                         |   |   |
| SIGNATURES                                                   |   | 44 |
|                                                         |   |   |
| EXHIBIT                  INDEX                               |    | 45 |

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**Business        of BNA and Subsidiary Companies**

----

**Negative        Economic Conditions**

**Competition**

**Technological        Changes**

----

**Legal        And Regulatory Changes**

**Distribution        Arrangements**

**Employment        Costs**

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| Name                                   | Age    |   | Present                    position and prior experience                                                             |
|---------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------------|
| Cynthia                    J. Bolbach       | 58     |   | Vice                  President and Corporate Secretary                                                              |
|                                        |   |   |     Corporate                    Secretary since 1995                                            |
|                                        |   |   |     and                    vice president since 2002. Joined                                     |
|                                        |   |   |     BNA                    in 1972                                                               |
|                                        |   |   |                                                                                                                 |
| Eunice                    L. Bumgardner     | 45     |   | Vice                    President & General                    Counsel        |
|                                        |   |   |     Vice                    president since 1996 and                                             |
|                                        |   |   |     general                    counsel since 1995. Joined                                        |
|                                        |   |   |     BNA                    in 1994.                                                              |
|                                        |   |   |                                                                                                                 |
| Carol                    A. Clark      | 49     |   | Vice                    President                                                 |
|                                        |   |   |     Vice                    president since 2001                                                 |
|                                        |   |   |     Previously                    served as Technology Director                                  |
|                                        |   |   |     since                    1997. Joined BNA in 1983.                                           |
|                                        |   |   |                                                                                                                 |
| Sandra                    C. Degler    | 66     |   | Chairman                    of the Board                                                                             |
|                                        |   |   |     Chairman                    since 2004 and vice chairman                                     |
|                                        |   |   |     since                    1998. Served as president of                                        |
|                                        |   |   |     Tax                    Management Inc. from 1983 to 2000.                                    |
|                                        |   |   |     Joined                    BNA in 1963.                                                       |
|                                        |   |   |                                                                                                                 |
| George                    J. Korphage       | 59     |   | Vice                    President and Chief Financial Officer                                                        |
|                                        |   |   |     Vice                    President since 1988 and chief financial                             |
|                                        |   |   |     Officer                    since 1989. Joined BNA in 1972.                                   |
|                                        |   |   |                                                                                                                 |
| Gilbert                  S. Lavine          | 54     |   | Treasurer                                                                                                            |
|                                        |   |   |     Treasurer                  since 1998                                                        |
|                                        |   |   |                                                                                                                 |
| Gregory                  C. McCaffery  | 45     |   |  Vice                  President and Chief Operating Officer                                                    |
|                                        |   |   |      Vice                  president since 2000 and chief operating                    |
|                                        |   |   |      officer                  since 2003.  Joined BNA in 1986                          |
|                                        |   |   |                                                                                                                 |
| James                    R. Schneble        | 51     |   | Controller                                                                                                           |
|                                        |   |   |     Controller                    since 1990. Joined BNA in 1985.                                |
|                                        |   |   |                                                                                                                 |
| Robert                    L. Velte          | 58     |   | Vice                    President                                                                                    |
|                                        |   |   |     Vice                    President since 1995. Joined BNA in                                  |
|                                        |   |   |     1976.                    Retired in December 2005                                            |
|                                        |   |   |                                                                                                                 |
| Paul                    N. Wojcik           | 57     |   | Vice                    Chairman, President and Chief                                                                |
|                                        |   |   | Executive                    Officer                                                                                 |
|                                        |   |   |     Elected                    vice chairman in 2004,                                            |
|                                        |   |   |     president                    in 1995 and CEO in 1997.                                        |
|                                        |   |   |     Joined                    BNA in 1972.                                                       |

----

| Stock                      Price                                                                                        |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|         January                      1, 2004 - March 21, 2004         |   | $      | 11.25  |   |
|         March                      22, 2004 - September 19, 2004      |   |   | 11.75  |   |
|         September                      20, 2004 - March 20, 2005      |   |   | 12.00  |   |
|         March                      21, 2005 - September 18, 2005      |   |   | 12.75  |   |
|         September                      19, 2005 - December 31, 2005   |   |   | 13.00  |   |

| Record                  Date and Dividend Amount                                    |   |   |   |   |
|-------------------------------------------------------------------------------------|--------|--------|--------|--------|
|         March                  20, 2004     |   | $      | .15    |   |
|         September                  18, 2004 |   |   | .16    |   |
|         March                  19, 2005     |   |   | .16    |   |
|         September                  17, 2005 |   |   | .16    |   |

|                                                                                   |   |  Total                  Number    |      |  Average                         |   |
|----------------------------------------------------------------------------------------|--------|----------------------------------------|-----------|---------------------------------------|--------|
|                                                                                   |   |  of                   Shares |      |  Price                           |   |
|  Four-Week                Period                                                  |   | Purchased                              |      |  Paid                  per Share |   |
|     September                11, 2005 - October 8, 2005            |   |                                   | 188,570   |                                  | $      | 13.00 |   |
|     October                9, 2005 - November 5, 2005              |   |                                   | 114,417   |                                  | $      | 13.00 |   |
|     November                6, 2005 - December 3, 2005             |   |                                   | 205,774   |                                  | $      | 13.00 |   |
|     December  4,                2005 - December 31, 2005 |   |                                   | 1,020,759 |                                  | $      | 13.00 |   |

----

**The      Bureau of National Affairs, Inc.**

**Consolidated      Operating and Financial Summary:      2005-2001**

|                                                                              |   | 2005   |    | 2004   |   | 2003    |   | 2002   |    | 2001   |   |
|-----------------------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|
|                                                                              |   |   |    |   |   |    |   |   |    |   |   |
| Operating                  Revenues                                               |   | $      | 329,030 |   | $      | 321,256 |   | $      | 311,824 |   | $      | 309,790 |   | $ | 305,965 |   |
| Operating                  Expenses                                               |   |   | 287,128 |   |   | 283,304 |   |   | 286,274 |   |   | 281,900 |   |   | 291,489 |   |
| Operating                  Profit                                                 |   |   | 41,902  |   |   | 37,952  |   |   | 25,550  |   |   | 27,890 |   |   | 14,476 |   |
|     Non-operating                  Income :                   |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |
|     Investment                  Income                        |   |   | 4,132   |   |   | 3,713   |   |   | 4,644   |   |   | 6,235 |   |   | 8,542 |   |
|     Interest                  Expense                         |   |   | (5,907  | )      |   | (5,620  | )      |   | (5,710  | )      |   | (5,829 | ) |   | (6,000 | ) |
|     Other                  Income (Expense)                   |   |   | (28     | )      |   | (44     | )      |   | 724     |   |   | 191 |   |   | 4,421 |   |
| Income                  Before Income Taxes and                                   |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |
|     Cumulative                  Effect of Accounting Change   |   |   | 40,099  |   |   | 36,001  |   |   | 25,208  |   |   | 28,487 |   |   | 21,439 |   |
| Income                  Taxes                                                     |   |   | 16,017  |   |   | 13,442  |   |   | 9,123   |   |   | 9,670 |   |   | 8,177 |   |
| Income                  from Operations                                           |   |   | 24,082  |   |   | 22,559  |   |   | 16,085  |   |   | 18,817 |   |   | 13,262 |   |
| Cumulative                  Effect of Accounting Change (a)                       |   |   | ---     |   |   | ---     |   |   | ---     |   |   | (4,440 | ) |   | --- |   |
| Net                  Income                                                       |   | $      | 24,082  |   | $      | 22,559  |   | $      | 16,085  |   | $      | 14,377 |   | $ | 13,262 |   |
| Profit                  Margins (% of revenues):                                  |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |
| Operating                  Profit                                                 |   |   | 12.7    |   |   | 11.8    |   |   | 8.2     |   |   | 9.0 |   |   | 4.7 |   |
| Earnings                  (b)                                                     |   |   | 7.3     |   |   | 7.0     |   |   | 5.2     |   |   | 6.1 |   |   | 4.3 |   |
| Earnings                  Per Share from Operations                               |   | $      | .77     |   | $      | .69     |   | $      | .46     |   | $      | .53 |   | $ | .35 |   |
| Cumulative                  Effect of Accounting Change (a)                       |   |   | ---     |   |   | ---     |   |   | ---     |   |   | (.12 | ) |   | --- |   |
| Total                  Earnings Per Share                                         |   | $      | .77     |   | $      | .69     |   | $      | .46     |   | $      | .41 |   | $ | .35 |   |
| Dividends                  Per Share                                              |   | $      | .32     |   | $      | .31     |   | $      | .30     |   | $      | .30 |   | $ | .30 |   |
| Balance                  Sheet Data:                                              |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |
|     Total                  Assets                             |   | $      | 315,562 |   | $      | 318,347 |   | $      | 330,282 |   | $      | 340,293 |   | $ | 376,423 |   |
|     Long-Term                  Debt-less current portion      |   |   | 55,000  |   |   | 62,500  |   |   | 70,000  |   |   | 75,000 |   |   | 84,000 |   |
| Employee                  Data:                                                   |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |
|     Number                  of Employees                      |   |   | 1,729   |   |   | 1,802   |   |   | 1,878   |   |   | 1,999 |   |   | 2,121 |   |
|     Total                  Employment Costs                   |   | $      | 177,138 |   | $      | 172,595 |   | $      | 174,363 |   | $      | 166,005 |   | $ | 162,060 |   |
| Stockholder                  Data at Year-End:                                    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |
|     Number                  of Stockholders                   |   |   | 1,673   |   |   | 1,711   |   |   | 1,786   |   |   | 1,834 |   |   | 1,807 |   |
|     Common                  Shares Outstanding (In thousands) |   |   | 30,204  |   |   | 31,719  |   |   | 33,653  |   |   | 34,922 |   |   | 37,492 |   |

----

|  2005                        |   | First                Quarter EndedMarch                26 |   | SecondQuarter                Ended June                18 |   | ThirdQuarter                Ended Sept.                10 |   | FourthQuarter                Ended Dec.                31 |   |
|-----------------------------------|--------|----------------------------------------------------------------|--------|-----------------------------------------------------------|--------|----------------------------------------------------------------|--------|----------------------------------------------------------------|--------|
|                              |   |                                                           |   |                                                      |   |                                                           |   |                                                           |   |
| Revenues                          |   | $                                                              | 70,247 |                                                      | $      | 70,677                                                         |   | $                                                              | 76,326 |   | $ | 111,780 |   |
| Gross                Profit       |   |                                                           | 31,125 |                                                      |   | 30,712                                                         |   |                                                           | 36,604 |   |   | 54,771 |   |
| Net                Income         |   |                                                           | 3,957  |                                                      |   | 3,496                                                          |   |                                                           | 6,592  |   |   | 10,037 |   |
|                              |   |                                                           |   |                                                      |   |                                                           |   |                                                           |   |   |   |   |   |
| Earnings                Per Share |   | $                                                              | .13    |                                                      | $      | .11                                                            |   | $                                                              | .21    |   | $ | .32 |   |

|  2004                        |   | First                Quarter                EndedMarch                 27 |   | SecondQuarter                  Ended June                  19 |   | ThirdQuarter                  Ended Sept.                  11 |   | FourthQuarter                Ended Dec.                31 |   |
|-----------------------------------|--------|--------------------------------------------------------------------------------|--------|---------------------------------------------------------------|--------|---------------------------------------------------------------|--------|-----------------------------------------------------------|--------|
|                              |   |                                                                           |   |                                                          |   |                                                          |   |                                                      |   |
| Revenues                          |   | $                                                                              | 69,913 |                                                          | $      | 69,901                                                        |   | $                                                         | 72,994 |   | $ | 108,448 |   |
| Gross                Profit       |   |                                                                           | 31,143 |                                                          |   | 31,744                                                        |   |                                                      | 34,755 |   |   | 56,134 |   |
| Net                Income         |   |                                                                           | 3,701  |                                                          |   | 3,435                                                         |   |                                                      | 5,954  |   |   | 9,469 |   |
|                              |   |                                                                           |   |                                                          |   |                                                          |   |                                                      |   |   |   |   |   |
| Earnings                Per Share |   | $                                                                              | .11    |                                                          | $      | .11                                                           |   | $                                                         | .18    |   | $ | .29 |   |

----

**Overview**

**Results      of Operations**

**2005      vs. 2004**

----

** **

**2004      vs. 2003**

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**Cash      Flows, Liquidity, and Financial Resources**

----

|                                          |   | Payments                Due by Period |    |
|-----------------------------------------------|--------|---------------------------------------|---------|
|  Contractual                Obligations: |   |  Total                           |    | Less                than1                Year |   | 1-3Years |   | 4-5Years |   | After                5Years |   |
| Term                Debt                      |   | $                                     | 78,956  |   | $ | 12,304 |   | $ | 28,354 |   | $ | 25,071 |   | $ | 13,227 |   |
| Operating                Leases               |   |                                  | 12,053  |   |   | 6,457 |   |   | 4,336 |   |   | 1,200 |   |   | 60 |   |
| Planned                pension contributions  |   |                                  | 14,000  |   |   | 14,000 |   |   | --- |   |   | --- |   |   | --- |   |
| Deferred                Real Estate Tax       |   |                                  | 6,760   |   |   | --- |   |   | 6,760 |   |   | --- |   |   | --- |   |
| Total                                         |   | $                                     | 111,769 |   | $ | 32,761 |   | $ | 39,450 |   | $ | 26,271 |   | $ | 13,287 |   |

**Critical      Accounting Policies**

----

**Accounting      Pronouncements**

*Accounting Changes and Error Corrections—a      replacement of APB Opinion No. 20 and FASB Statement No. 3.*

|  Expected              Maturity Date |   | 2006   |   | 2007   |   | 2008   |   | 2009   |   | 2010   |   | Thereafter |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------------|--------|
|                                      |   |   |   |   |   |   |   |   |   |   |   |       |   |
| Municipal                Bonds            |   | $      | 10,059 |   | $      | 24,431 |   | $      | 7,143  |   | $      | 7,990      |   | $ | 2,128 |   | $ | 34,486 |   |
| Average                Interest Yield     |   |   | 5.0%   |   |   | 5.0%   |   |   | 6.1%   |   |   | 5.3%       |   |   | 4.7% |   |   | 4.8% |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |   |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |   |   |
| Corporate                Debt             |   | $      | 1,672  |   | $      | 3,570  |   |   | ------ |   |   | ------     |   |   | ------ |   |   | ------ |   |
| Average                Interest Yield     |   |   | 4.6%   |   |   | 6.4%   |   |   |   |   |   |       |   |   |   |   |   |   |   |

----

----

**Report      of Independent Registered Public Accounting Firm**

----

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**THE      BUREAU OF NATIONAL AFFAIRS, INC.**

**CONSOLIDATED      STATEMENTS OF INCOME**

**YEARS      ENDED DECEMBER 31, 2005, 2004, AND 2003**

|                                                                                      |   |   |    |   |   |    |   |  Percent                of Operating Revenues |    |
|-------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|----------------------------------------------------|---------|
|                                                                                      |   |   |    |   |   |    |   |  (Unaudited)                                  |    |
|                                                                                      |   | 2005   |    | 2004   |   | 2003    |   | 2005                                               |    | 2004 |   | 2003 |   |
| **Operating                Revenues**(Note                3)** **                    |   | $      | 329,030 |   | $      | 321,256 |   | $                                                  | 311,824 |   |   | 100.0 | % |   | 100.0 | % |   | 100.0 | % |
| **Operating                Expenses**                                                     |   |   |    |   |   |    |   |                                               |    |   |   |   |   |   |   |   |   |   |   |
|     (Notes                3,4,9, and 11):                             |   |   |    |   |   |    |   |                                               |    |   |   |   |   |   |   |   |   |   |   |
|     Editorial,                production, and distribution            |   |   | 175,818 |   |   | 171,300 |   |                                               | 171,597 |   |   | 53.4 |   |   | 53.3 |   |   | 55.0 |   |
|     Selling                                                           |   |   | 52,460  |   |   | 55,316  |   |                                               | 56,698  |   |   | 16.0 |   |   | 17.2 |   |   | 18.2 |   |
|     General                and administrative                         |   |   | 58,850  |   |   | 56,688  |   |                                               | 57,979  |   |   | 17.9 |   |   | 17.7 |   |   | 18.6 |   |
| **Total                Operating Expenses**                                               |   |   | 287,128 |   |   | 283,304 |   |                                               | 286,274 |   |   | 87.3 |   |   | 88.2 |   |   | 91.8 |   |
| **Operating                Profit**                                                       |   |   | 41,902  |   |   | 37,952  |   |                                               | 25,550  |   |   | 12.7 |   |   | 11.8 |   |   | 8.2 |   |
| **Non-Operating                Income:**                                                  |   |   |    |   |   |    |   |                                               |    |   |   |   |   |   |   |   |   |   |   |
|     Investment                income (Note 5)                         |   |   | 4,132   |   |   | 3,713   |   |                                               | 4,644   |   |   | 1.3 |   |   | 1.1 |   |   | 1.5 |   |
|     Interest                expense (Note 10)                         |   |   | (5,907  | )      |   | (5,620  | )      |                                               | (5,710  | ) |   | (1.8 | ) |   | (1.7 | ) |   | (1.8 | ) |
|     Other                income (expense) (Note 6)                    |   |   | (28     | )      |   | (44     | )      |                                               | 724     |   |   | --- |   |   | --- |   |   | 0.2 |   |
| **Total                Non-Operating Income**                                             |   |   | (1,803  | )      |   | (1,951  | )      |                                               | (342    | ) |   | (0.5 | ) |   | (0.6 | ) |   | (0.1 | ) |
| **Income                Before Income Taxes**                                             |   |   | 40,099  |   |   | 36,001  |   |                                               | 25,208  |   |   | 12.2 |   |   | 11.2 |   |   | 8.1 |   |
|     Provision                for                income taxes (Note 8) |   |   | 16,017  |   |   | 13,442  |   |                                               | 9,123   |   |   | 4.9 |   |   | 4.2 |   |   | 2.9 |   |
| **Net                Income**                                                             |   | $      | 24,082  |   | $      | 22,559  |   | $                                                  | 16,085  |   |   | 7.3 | % |   | 7.0 | % |   | 5.2 | % |
| **Earnings                Per Share** (Note                12)                       |   | $      | .77     |   | $      | .69     |   | $                                                  | .46     |   |   |   |   |   |   |   |   |   |   |

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**THE      BUREAU OF NATIONAL AFFAIRS, INC.**

**CONSOLIDATED      BALANCE SHEETS**

**DECEMBER      31, 2005 AND 2004**

**ASSETS**

|                                                                                 |   | December                31,    |    |
|--------------------------------------------------------------------------------------|--------|-----------------------------------------------|---------|
|                                                                                 |   | 2005                                          |    | 2004 |   |
| **Current                Assets:**                                                   |   |                                          |    |   |   |   |   |
|     Cash                and cash equivalents (Note 5)            |   | $                                             | 9,056   |   | $ | 8,442 |   |
|     Short-term                investments (Note 5)               |   |                                          | 11,731  |   |   | 11,752 |   |
|     Receivables                (Note 9)                          |   |                                          | 37,740  |   |   | 30,827 |   |
|     Inventories                (Note 9)                          |   |                                          | 3,206   |   |   | 3,535 |   |
|     Prepaid                expenses                              |   |                                          | 4,118   |   |   | 3,864 |      |
|     Deferred                selling expenses (Note 3)            |   |                                          | 4,371   |   |   | 3,474 |   |
|     Deferred                income                taxes (Note 8) |   |                                          | 6,418   |   |   | 8,554 |   |
| **Total                Current Assets**                                              |   |                                          | 76,640  |   |   | 70,448 |   |
| **Marketable                Securities**(Note                5)                      |   |                                          | 97,898  |   |   | 99,817 |   |
| **Property                and Equipment**(Note                9)                     |   |                                          | 26,709  |   |   | 28,297 |   |
| **Deferred                Income Taxes**(Note                8)                      |   |                                          | 21,436  |   |   | 22,955 |   |
| **Goodwill**(Note                7)                                                  |   |                                          | 73,366  |   |   | 73,452 |   |
| **Intangible                and Other Assets**(Note                9)                |   |                                          | 19,513  |   |   | 23,378 |   |
| **    Total                Assets**                              |   | $                                             | 315,562 |   | $ | 318,347 |   |

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**THE      BUREAU OF NATIONAL AFFAIRS, INC.**

**CONSOLIDATED      BALANCE SHEETS**

**DECEMBER      31, 2005 AND 2004**

**LIABILITIES      AND STOCKHOLDERS’ EQUITY**

|                                                                                                        |   |  December                31, |     |
|-------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|----------|
|                                                                                                        |   | 2005                              |     | 2004 |   |
| **Current                Liabilities:**                                                                     |   |                              |     |   |   |   |   |
|     Current                portion of long-term debt (Note 10)                          |   | $                                 | 7,500    |   | $ | 7,500 |   |
|     Payables                and                accrued liabilities (Note 9)             |   |                              | 51,146   |   |   | 44,963 |   |
|     Deferred                revenues (Note 3)                                           |   |                              | 118,064  |   |   | 112,085 |   |
| **    Total                Current Liabilities**                                        |   |                              | 176,710  |   |   | 164,548 |   |
| **Long-Term                Debt,**                less current portion (Note 10)                            |   |                              | 55,000   |   |   | 62,500 |   |
| **Postretirement                Benefits,**                less current portion (Note 4)                    |   |                              | 66,475   |   |   | 67,518 |   |
| **Other                Liabilities**                                                                        |   |                              | 8,473    |   |   | 8,682 |   |
| **    Total                Liabilities**                                                |   |                              | 306,658  |   |   | 303,248 |   |
| **Commitments                and Contingencies** (Notes                11 and 12)                      |   |                              |     |   |   |   |   |
| **Stockholders’                Equity** (Note                12):                                |   |                              |     |   |   |   |   |
|     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                                           |   |                              | 22,730   |   |   | 15,910 |   |
|     Retained                earnings                                                    |   |                              | 121,985  |   |   | 108,030 |   |
|     Treasury                stock,                at cost                               |   |                              | (192,610 | ) |   | (166,154 | ) |
|     Elements                of                other comprehensive income:               |   |                              |     |   |   |   |   |
|         Net                unrealized gain on marketable securities |   |                              | 294      |   |   | 354 |   |
|         Foreign                currency translation adjustment      |   |                              | (65      | ) |   | (208 | ) |
|         Minimum                pension liability adjustment         |   |                              | (597     | ) |   | --- |   |
| **    Total                Stockholders’ Equity**                                 |   |                              | 8,904    |   |   | 15,099 |   |
| **    Total                Liabilities and Stockholders’ Equity**                 |   | $                                 | 315,562  |   | $ | 318,347 |   |

----

**THE      BUREAU OF NATIONAL AFFAIRS, INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**YEARS      ENDED DECEMBER 31, 2005, 2004, AND 2003**

|                                                                                                           |   | 2005   |                          | 2004   |   | 2003       |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------|--------|--------|------------|--------|
| **Cash                Flows from Operating Activities:**                                                       |   |   |                          |   |   |       |   |   |   |   |
|     Net                income                                                              |   | $      | 24,082                        |   | $      | 22,559     |   | $ | 16,085 |   |
|     Adjustments                to                reconcile net income to net               |   |   |                          |   |   |       |   |   |   |   |
|         cash                provided by operating activities-          |   |   |                          |   |   |       |   |   |   |   |
|         Depreciation                and amortization                   |   |   | 9,762                         |   |   | 10,282     |   |   | 14,292 |   |
|         Deferred              income              taxes                |   |   |     4,023 |   |   | (116  | )      |   | (2,390 | )  |
|         (Gain)                on sales of securities                   |   |   | (347                          | )      |   | (314       | )      |   | (1,174 | ) |
|         (Gain)                loss on disposals of assets              |   |   | 28                            |   |   | 44         |   |   | (724 | ) |
|         Capitalized                interest                            |   |   | --                            |   |   | (367       | )      |   | (195 | ) |
|         Others                                                         |   |   | 1,937                         |   |   | 1,140      |   |   | 1,079 |   |
|     Changes                in operating assets and liabilities -                      |   |   |                          |   |   |       |   |   |   |   |
|         Receivables                                                    |   |   | (7,967                        | )      |   | 2,026      |   |   | 2,919 |      |
|         Deferred                revenues                               |   |   | 5,979                         |   |   | (2,824     | )      |   | (4,215 | ) |
|         Payables                and                accrued liabilities |   |   | (161                          | )      |   | 1,754      |   |   | 1,822 |   |
|         Postretirement                benefits                         |   |   | 3,649                         |   |   | 2,333      |   |   | 3,923 |   |
|         Deferred                selling expenses                       |   |   | (897                          | )      |   | 1,151      |   |   | 1,199 |   |
|         Inventories                                                    |   |   | 329                           |   |   | 267        |   |   | (207 | ) |
|         Other                assets and liabilities - net              |   |   | (1,001                        | )      |   | 494        |   |   | 197 |   |
| Net                cash provided by operating activities                                                       |   |   | 39,416                        |   |   | 38,429     |   |   | 32,611 |   |
| **Cash                Flows from Investing Activities:**                                                       |   |   |                          |   |   |       |   |   |   |   |
|     Purchase                of                equipment and furnishings                    |   |   | (1,776                        | )      |   | (1,706     | )      |   | (903 | ) |
|     Capitalized                software                                                    |   |   | (1,160                        | )      |   | (3,884     | )      |   | (3,347 | ) |
|     Building                improvements                                                   |   |   | --                            |   |   | (69        | )      |   | (585 | ) |
|     Business                purchase price adjustments                                     |   |   | 86                            |   |   | 400        |   |   | (447 | ) |
|     Proceeds                from                sales of assets                            |   |   | --                            |   |   | 175        |   |   | 523 |   |
|     Purchase                of                publishing assets                            |   |   | --                            |   |   | (102       | )      |   | (136 | ) |
|     Investment              security sales and maturities                                  |   |   | 57,282                        |   |   | 83,806     |   |   | 122,471 |   |
|     Investment              securities purchases                                           |   |   | (55,971                       | )      |   | (89,811    | )      |   | (113,473 | ) |
| Net                cash provided by (used for) investing activities                                       |   |   | (1,539                        | )      |   | (11,191    | )      |   | 4,103 |   |

----

**THE      BUREAU OF NATIONAL AFFAIRS, INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**YEARS      ENDED DECEMBER 31, 2005, 2004, AND 2003**

|                                                                                |   | 2005   |    | 2004   |   | 2003    |   |
|-------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| **Cash                Flows from Financing Activities:**                            |   |   |    |   |   |    |   |   |   |   |
|     Sales                of capital stock to employees          |   |   | 11,479  |   |   | 7,118   |   |   | 8,497 |   |
|     Purchases                of                treasury stock   |   |   | (31,115 | )      |   | (29,242 | )      |   | (22,782 | ) |
|     Dividends                paid                               |   |   | (10,127 | )      |   | (10,160 | )      |   | (10,471 | ) |
|     Repayment                of                borrowings       |   |   | (7,500  | )      |   | (5,000  | )      |   | (5,000 | ) |
|     Net                cash (used for) financing activities     |   |   | (37,263 | )      |   | (37,284 | )      |   | (29,756 | ) |
| **Net                Increase (Decrease) in Cash and Cash Equivalents**             |   |   | 614     |   |   | (10,046 | )      |   | 6,958 |   |
| **Cash                and Cash Equivalents,** beginning                of year |   |   | 8,442   |   |   | 18,488  |   |   | 11,530 |   |
| **Cash                and Cash Equivalents,**end                of year             |   | $      | 9,056   |   | $      | 8,442   |   | $ | 18,488 |   |
|                                                                                |   |   |    |   |   |    |   |   |   |   |
|                                                                                |   |   |    |   |   |    |   |   |   |   |
| **Supplemental                Cash Flow Information:**                              |   |   |    |   |   |    |   |   |   |   |
| Interest                paid                                                        |   | $      | 5,480   |   | $      | 5,588   |   | $ | 5,597 |   |
| Income                taxes paid                                                    |   |   | 12,229  |   |   | 13,650  |   |   | 10,325 |   |

----

**THE      BUREAU OF NATIONAL AFFAIRS, INC.**

**CONSOLIDATED      STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE      INCOME**

**YEARS      ENDED DECEMBER 31, 2005, 2004, AND 2003**

|                                                                                                                                                |   | ComprehensiveIncome(Note                13) |   | CapitalStockIssued |   |  AdditionalPaid-InCapital |   | RetainedEarnings |   | TreasuryStock |   |  Accum.                OtherComprehensiveIncome |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|--------|--------------------|--------|--------------------------------|--------|------------------|--------|---------------|--------|------------------------------------------------------|--------|
| **Balance,                January 1, 2003**                                                                                                         |   |                                        |        |               | $      | 57,167                         |   | $                | 5,863  |          | $      | 90,017                                               |   | $ | (119,698 | ) | $ | (1,890 | ) |
| Net                Income                                                                                                                           |   | $                                           | 16,085 |               |   | ---                            |   |             | ---    |          |   | 16,085                                               |   |   | --- |   |   | --- |   |
| Other                Comprehensive Income, net of tax:                                                                                              |   |                                        |        |               |   |                                |   |             |        |          |   |                                                      |   |   |  |   |   |  |   |
|      Unrealized gain                on marketable                securities        |   |                                        | 1,794  |               |   | ---                            |   |             | ---    |          |   | ---                                                  |   |   | --- |   |   | 1,794 |   |
|     Currency                translation adjustment                                                                              |   |                                        | (79    | )                  |   | ---                            |   |             | ---    |          |   | ---                                                  |   |   | --- |   |   | (79 | ) |
| Comprehensive                Income                                                                                                                 |   | $                                           | 17,800 |               |   |                                |   |             |        |          |   |                                                      |   |   |  |   |   |  |   |
| Sales                of Class A treasury shares to employees                                                                                        |   |                                        |        |               |   | ---                            |   |             | 5,487  |          |   | ---                                                  |   |   | 3,010 |   |   | --- |   |
| Repurchases                of shares                                                                                                                |   |                                        |        |               |   | ---                            |   |             | ---    |          |   | ---                                                  |   |   | (22,782 | ) |   | --- |   |
| Cash                dividends--$.30 per share                                                                                                       |   |                                        |        |               |   | ---                            |   |             | ---    |          |   | (10,471                                              | )      |   | --- |   |   | --- |   |
| **Balance,                December 31, 2003**                                                                                                       |   |                                        |        |               |   | 57,167                         |   |             | 11,350 |          |   | 95,631                                               |   |   | (139,470 | ) |   | (175 | ) |
| Net                Income                                                                                                                           |   | $                                           | 22,559 |               |   | ---                            |   |             | ---    |          |   | 22,559                                               |   |   | -- |   |   | --- |   |
| Other                Comprehensive Income, net of tax:                                                                                              |   |                                        |        |               |   |                                |   |             |        |          |   |                                                      |   |   |  |   |   |  |   |
|     Unrealized                gain                on marketable securities                                                      |   |                                        | 371    |               |   | ---                            |   |             | ---    |          |   | ---                                                  |   |   | --- |   |   | 371 |   |
|     Currency                translation adjustment                                                                              |   |                                        | (50    | )                  |   | ---                            |   |             | ---    |          |   | ---                                                  |   |   | --- |   |   | (50 | ) |
| Comprehensive                Income                                                                                                                 |   |  $                                     | 22,880 |               |   |                                |   |             |        |          |   |                                                      |   |   |  |   |   |  |   |
| Sales                of Class A treasury shares to employees                                                                                        |   |                                        |        |               |   | ---                            |   |             | 4,560  |          |   | ---                                                  |   |   | 2,558 |   |   | --- |   |
| Repurchases                of shares                                                                                                                |   |                                        |        |               |   | ---                            |   |             | ---    |          |   | ---                                                  |   |   | (29,242 | ) |   | --- |   |
| Cash                dividends--$.31 per share                                                                                                       |   |                                        |        |               |   | ---                            |   |             | ---    |          |   | (10,160                                              | )      |   | --- |   |   | --- |   |
| **Balance,                December 31, 2004**                                                                                                       |   |                                        |        |               |   | 57,167                         |   |             | 15,910 |          |   | 108,030                                              |   |   | (166,154 | ) |   | 146 |   |
| Net                Income                                                                                                                           |   | $                                           | 24,082 |               |   | ---                            |   |             | ---    |          |   | 24,082                                               |   |   | --- |   |   | --- |   |
| Other                Comprehensive Income, net of tax:                                                                                              |   |                                        |        |               |   |                                |   |             |        |          |   |                                                      |   |   |  |   |   |  |   |
|     Unrealized                (loss) on marketable securities                                                                   |   |                                        | (60    | )                  |   | ---                            |   |             | ---    |          |   | ---                                                  |   |   | --- |   |   | (60 | ) |
|     Currency                translation adjustment                                                                              |   |                                        | 143    |               |   | ---                            |   |             | ---    |          |   | ---                                                  |   |   | --- |   |   | 143 |   |
|     Minimum                pension liability adjustment                                                                         |   |                                        | (597   | )                  |   | ---                            |   |             | ---    |          |   | ---                                                  |   |   | --- |   |   | (597 | ) |
| Comprehensive                Income                                                                                                                 |   | $                                           | 23,568 |               |   |                                |   |             |        |          |   |                                                      |   |   |  |   |   |  |   |
| Sales                of Class A treasury shares to employees                                                                                        |   |                                        |        |               |   | ---                            |   |             | 6,820  |          |   | ---                                                  |   |   | 4,659 |   |   | --- |   |
| Repurchases                of shares                                                                                                                |   |                                        |        |               |   | ---                            |   |             | ---    |          |   | --                                                   |   |   | (31,115 | ) |   | --- |   |
| Cash                dividends--$.32 per share                                                                                                       |   |                                        |        |               |   | ---                            |   |             | ---    |          |   | (10,127                                              | )      |   | --- |   |   | --- |   |
| **Balance,                December 31, 2005**                                                                                                       |   |                                        |        |               | $      | 57,167                         |   | $                | 22,730 |          | $      | 121,985                                              |   | $ | (192,610 | ) | $ | (368 | ) |

----

----

|                                                    |   |  Pension                Benefits |    | Other                Postretirement  Benefits |   |
|---------------------------------------------------------|--------|---------------------------------------|---------|----------------------------------------------------|--------|
|                                                    |   | 2005                                  |    | 2004                                               |   | 2005 |   | 2004 |   |
| Change                in projected benefit obligation:  |   |                                  |    |                                               |   |   |   |   |   |
| Benefit                obligation -- January 1          |   | $                                     | 177,043 |                                               | $      | 160,697 |   | $ | 128,744 |   | $ | 87,168 |   |
| Service                cost                             |   |                                  | 7,814   |                                               |   | 7,677 |   |   | 4,936 |   |   | 4,345 |   |
| Interest                cost                            |   |                                  | 9,961   |                                               |   | 9,451 |   |   | 7,361 |   |   | 6,294 |   |
| Actuarial                loss                           |   |                                  | 3,939   |                                               |   | 6,944 |   |   | 1,948 |   |   | 34,141 |   |
| Benefits                paid                            |   |                                  | (7,868  | )                                                  |   | (7,726 | ) |   | (3,066 | ) |   | (2,816 | ) |
| Curtailments                                            |   |                                  | ---     |                                               |   | --- |   |   | --- |   |   | (388 | ) |
| Benefit                obligation -- December 31        |   |                                  | 190,889 |                                               |   | 177,043 |   |   | 139,923 |   |   | 128,744 |   |
| Change                in plan assets:                   |   |                                  |    |                                               |   |   |   |   |   |   |   |   |   |
| Fair                value of plan assets -- January 1   |   |                                  | 126,920 |                                               |   | 106,557 |   |   | 24,087 |   |   | 21,934 |   |
| Actual                return on plan assets             |   |                                  | 6,440   |                                               |   | 13,915 |   |   | 963 |   |   | 2,153 |   |
| Employer                contribution                    |   |                                  | 14,000  |                                               |   | 14,000 |   |   | --- |   |   | --- |   |
| Benefits                paid                            |   |                                  | (7,694  | )                                                  |   | (7,552 | ) |   | --- |   |   | --- |   |
| Fair                value of plan assets -- December 31 |   |                                  | 139,666 |                                               |   | 126,920 |   |   | 25,050 |   |   | 24,087 |   |
| Funded                status                            |   |                                  | (51,223 | )                                                  |   | (50,123 | ) |   | (114,873 | ) |   | (104,657 | ) |
| Unrecognized                net loss                    |   |                                  | 38,008  |                                               |   | 30,892 |   |   | 46,934 |   |   | 46,375 |   |
| Unrecognized                prior service cost          |   |                                  | 619     |                                               |   | 681 |   |   | (71 | ) |   | (125 | ) |
| Net                amount recognized                    |   | $                                     | (12,596 | )                                                  | $      | (18,550 | ) | $ | (68,010 | ) | $ | (58,407 | ) |
|                                                    |   |                                  |    |                                               |   |   |   |   |   |   |   |   |   |
| Assumed                discount rate                    |   |                                  | 5.5%    |                                               |   | 5.7% |   |   | 5.5% |   |   | 5.7% |   |
| Assumed                rate of compensation increase    |   |                                  | 4.75%   |                                               |   | 5.0% |   |   | --- |   |   | --- |   |

|                                                  |   |  Pension                Benefits  |    | Other                Postretirement Benefits                                       |   |
|-------------------------------------------------------|--------|---------------------------------------------|---------|------------------------------------------------------------------------------------|--------|
|                                                  |   |  2005                                  |    |  2004             |   |  2005     |   |  2004 |   |
| Accrued                benefit liability              |   | $                                           | (14,248 | )                                                                                  | $      | (18,550 | ) | $ | (68,010 | ) | $ | (58,407 | ) |
| Intangible                asset                       |   |                                        | 643     |                                                                               |   | --- |   |   | --- |   |   | --- |   |
| Accumulated                other comprehensive income |   |                                        | 1,009   |                                                                               |   | --- |   |   | --- |   |   | --- |   |
| Net                amount recognized                  |   | $                                           | (12,596 | )                                                                                  | $      | (18,550 | ) | $ | (68,010 | ) | $ | (58,407 | ) |

----

|                             |   |     |   | Other          |   |
|----------------------------------|--------|----------|--------|----------------|--------|
|                             |   | Pension  |   | Postretirement |   |
|                             |   | Benefits |   | Benefits       |   |
| 2006                             |   | $        | 8,095  |           | $      | 3,136 |   |
| 2007                             |   |     | 8,667  |           |   | 3,647 |   |
| 2008                             |   |     | 9,421  |           |   | 4,152 |   |
| 2009                             |   |     | 10,126 |           |   | 4,778 |   |
| 2010                             |   |     | 10,989 |           |   | 5,240 |   |
| Years                2011 - 2015 |   |     | 69,599 |           |   | 36,072 |   |

|                                          |   |                Pension                Benefits |    |
|-----------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------|---------|
|                                          |   | 2005                                                                                                                      |    | 2004 |   |
| Projected                benefit obligation   |   | $                                                                                                                         | 190,889 |   | $ | 177,043 |   |
| Accumulated                benefit obligation |   |                                                                                                                      | 153,914 |   |   | 139,611 |   |
| Fair                value of plan assets      |   |                                                                                                                      | 139,666 |   |   | 126,920 |   |

|                                                           |   | 2005   |    | 2004   |   | 2003   |   |
|----------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|
| Service                cost -- benefits earned during the year |   | $      | 7,814   |   | $      | 7,677  |   | $ | 6,974 |   |
| Interest                cost                                   |   |   | 9,961   |   |   | 9,451  |   |   | 8,784 |   |
| Expected                return on plan assets                  |   |   | (10,960 | )      |   | (8,822 | )      |   | (7,042 | ) |
| Voluntary                early retirement program              |   |   | ---     |   |   | ---    |   |   | 1,760 |   |
| Amortization                of net actuarial loss              |   |   | 1,343   |   |   | 1,250  |   |   | 1,261 |   |
| Amortization                of prior service cost              |   |   | 62      |   |   | 62     |   |   | 62 |   |
| Pension                expense                                 |   | $      | 8,220   |   | $      | 9,618  |   | $ | 11,799 |   |
| Assumed                discount rate                           |   |   | 5.7%    |   |   | 6.0%   |   |   | 6.5% |   |
| Assumed                rate of compensation increase           |   |   | 5.0%    |   |   | 5.0%   |   |   | 5.0% |   |
| Expected                long-term return on plan assets        |   |   | 8.5%    |   |   | 8.5%   |   |   | 8.5% |   |

----

|                                                           |   | 2005   |   | 2004   |   | 2003   |   |
|----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Service                cost -- benefits earned during the year |   | $      | 4,936  |   | $      | 4,345  |   | $ | 3,140 |   |
| Interest                cost                                   |   |   | 7,361  |   |   | 6,294  |   |   | 4,599 |   |
| Expected                return on plan assets                  |   |   | (2,047 | )      |   | (1,864 | )      |   | (1,382 | ) |
| Amortization                of net actuarial loss              |   |   | 2,473  |   |   | 1,393  |   |   | --- |   |
| Amortization                of prior service cost              |   |   | (54    | )      |   | (54    | )      |   | (54 | ) |
| Curtailments                                                   |   |   | ---    |   |   | (388   | )      |   | --- |   |
| Other                postretirement benefits expense           |   | $      | 12,669 |   | $      | 9,726  |   | $ | 6,303 |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |
| Assumed                discount rate                           |   |   | 5.7%   |   |   | 6.0%   |   |   | 6.5% |   |
| Expected                long-term return on plan assets        |   |   | 8.5%   |   |   | 8.5%   |   |   | 8.5% |   |

|                                   |   |  Pension                Benefits  |     | Other                Postretirement Benefits |   |
|----------------------------------------|--------|---------------------------------------------|----------|---------------------------------------------------|--------|
|                                   |   | 2005                                        |     | 2004                                              |   | 2005 |   | 2004 |   |
| Equity                securities       |   |                                        | 65%      |                                              |   | 64% |   |   | 69% |   |   | 69% |   |
| Fixed                income securities |   |                                        |  29 |                                              |   | 29 |   |   | 30 |   |   | 27 |   |
| Cash                equivalents        |   |                                        |  6  |                                              |   | 7 |   |   | 1 |   |   | 4 |   |
| Total                                  |   |                                        | 100%     |                                              |   | 100% |   |   | 100% |   |   | 100% |   |

----

|                                     |   |  December                31, |    |
|------------------------------------------|--------|-----------------------------------|---------|
|                                     |   | 2005                              |    | 2004 |   |
| Cash                and cash equivalents |   | $                                 | 9,056   |   | $ | 8,442 |   |
| Short-term                investments    |   |                              | 11,731  |   |   | 11,752 |   |
| Marketable                securities     |   |                              | 97,898  |   |   | 99,817 |   |
| Total                                    |   | $                                 | 118,685 |   | $ | 120,011 |   |

|                                           |   | 2005   |   | 2004   |   | 2003  |   |
|------------------------------------------------|--------|--------|--------|--------|--------|-------|--------|
| Interest                income                 |   | $      | 3,284  |   | $      | 2,859 |   | $ | 2,882 |   |
| Dividend                income                 |   |   | 501    |   |   | 540   |   |   | 588 |   |
| Net                gain on sales of securities |   |   | 347    |   |   | 314   |   |   | 1,174 |   |
| Total                                          |   | $      | 4,132  |   | $      | 3,713 |   | $ | 4,644 |   |

----

| December                31, 2005 |   | AmortizedCost |    | GrossUnrealizedGains |   | GrossUnrealizedLosses |   | FairValue |   |
|----------------------------------|--------|---------------|---------|----------------------|--------|-----------------------|--------|-----------|--------|
| Equity                securities |   | $             | 15,061  |                 | $      | 1,085                 |   | $         | (478   | ) | $ | 15,668 |   |
| Municipal                bonds   |   |          | 86,396  |                 |   | 633              |   |      | (792   | ) |   | 86,237 |   |
| Corporate                debt    |   |          | 7,722   |                 |   | 53                    |   |      | (51    | ) |   | 7,724 |   |
| Total                            |   | $             | 109,179 |                 | $      | 1,771                 |   | $         | (1,321 | ) | $ | 109,629 |   |

| December                31, 2004 |   | AmortizedCost |    | GrossUnrealizedGains |   | GrossUnrealizedLosses |   | FairValue |   |
|----------------------------------|--------|---------------|---------|----------------------|--------|-----------------------|--------|-----------|--------|
| Equity                securities |   | $             | 15,667  |                 | $      | 1,081                 |   | $         | (629   | ) | $ | 16,119 |   |
| Municipal                bonds   |   |          | 91,941  |                 |   | 780                   |   |      | (828   | ) |   | 91,893 |   |
| Corporate                debt    |   |          | 3,418   |                 |   | 151                   |   |      | (12    | ) |   | 3,557 |   |
| Total                            |   | $             | 111,026 |                 | $      | 2,012                 |   | $         | (1,469 | ) | $ | 111,569 |   |

|                                 |   |        |   |  Gross                Unrealized Losses |   |
|--------------------------------------|--------|-------------|--------|----------------------------------------------|--------|
|                                 |   |  Fair  |   |  Less                than               |   |  More                than |   |
|  December              31, 2005 |   |  Value |   |  12                Months               |   |  12                Months |   |
|  Equity              Securities |   | $           | 3,187  |                                         | $      | --- |   | $ | (478 | ) |
|  Municipal              bonds   |   |        | 53,419 |                                         |   | (233 | ) |   | (559 | ) |
|  Corporate              Debt    |   |        | 5,242  |                                         |   | (27 | ) |   | (24 | ) |
|  Total                          |   | $           | 61,848 |                                         | $      | (260 | ) | $ | (1,061 | ) |

|                                   |   |        |   |  Gross                  Unrealized Losses |   |
|----------------------------------------|--------|-------------|--------|------------------------------------------------|--------|
|                                   |   |  Fair  |   |  Less                  than               |   |  More                  than |   |
|  December                31, 2004 |   |  Value |   |  12                  Months               |   |  12                  Months |   |
|  Equity                Securities |   | $           | 6,280  |                                           | $      | --- |   | $ | (629 | ) |
|  Municipal                bonds   |   |        | 37,366 |                                           |   | (330 | ) |   | (498 | ) |
|  Corporate                Debt    |   |        | 1,167  |                                           |   | (9 | ) |   | (3 | ) |
|  Total                            |   | $           | 44,813 |                                           | $      | (339 | ) | $ | (1,130 | ) |

----

|                                      |   |  Amortized     |   |  Fair  |   |
|-------------------------------------------|--------|-----------------------------------------|--------|-------------|--------|
|                                      |   |  Cost                              |   |  Value |   |
|  Within              one year        |   | $                                       | 11,812 |        | $      | 11,731 |   |
|  One              through five years |   |                                    | 45,638 |        |   | 45,261 |   |
|  Five              through 10 years  |   |                                    | 18,758 |        |   | 18,939 |   |
|  Over              ten years         |   |                                    | 15,480 |        |   | 15,549 |   |
|  No              fixed maturity date |   |                                    | 2,430  |        |   | 2,481 |   |
| Total                                     |   | $                                       | 94,118 |        |   | 93,961 |   |

|                                              |   | 2005   |   | 2004   |   | 2003 |   |
|---------------------------------------------------|--------|--------|--------|--------|--------|------|--------|
| Gain                on sales of publishing assets |   | $      | --     |   | $      | 59   |   | $ | 739 |   |
| Losses on                disposals of assets |   |   | (28    | )      |   | (103 | )      |   | (15 | ) |
| Total                                             |   | $      | (28    | )      | $      | (44  | )      | $ | 724 |   |

|                                       |   |             Publishing    |   |  Printing |   |  Software |   |  Total |   |
|--------------------------------------------|--------|------------------------------------------------------------------------------------------------------|--------|----------------|--------|----------------|--------|-------------|--------|
| Balance,              January 1, 2003      |   | $                                                                                                    | 49,998 |           | $      | 917            |   | $           | 22,867 |   | $ | 73,782 |   |
| Business              acquisition purchase |   |                                                                                                 |   |           |   |           |   |        |   |   |   |   |   |
| price                adjustments           |   |                                                                                                 | ---    |           |   | ---            |   |        | 70     |   |   | 70 |   |
| Balance,              December 31, 2003    |   |                                                                                                 | 49,988 |           |   | 917            |   |        | 22,937 |   |   | 73,852 |   |
| Business              acquisition purchase |   |                                                                                                 |   |           |   |           |   |        |   |   |   |   |   |
| price                adjustment            |   |                                                                                                 | ---    |           |   | ---            |   |        | (400)  |   |   | (400) |   |
| Balance,              December 31, 2004    |   |                                                                                                 | 49,998 |           |   | 917            |   |        | 22,537 |   |   | 73,452 |   |
| Business              acquisition purchase |   |                                                                                                 |   |           |   |           |   |        |   |   |   |   |   |
| price                adjustment            |   |                                                                                                 | ---    |           |   | ---            |   |        | (86)   |   |   | (86) |   |
| Balance,              December 31, 2005    |   | $                                                                                                    | 49,998 |           | $      | 917            |   | $           | 22,451 |   | $ | 73,366 |   |

----

|                                                                           |   | 2005   |   | 2004   |   | 2003   |   |
|--------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Income                Statement Provision for Income Taxes                     |   | $      | 16,017 |   | $      | 13,442 |   | $ | 9,123 |   |
| Stockholders'                Equity -- Change in:                              |   |   |   |   |   |   |   |   |   |   |
| Unrealized                gain (loss) on marketable securities                 |   |   | (33    | )      |   | 199    |   |   | 963 |   |
|     Foreign                currency translation adjustment |   |   | 77     |   |   | (27    | )      |   | (43 | )     |
|     Minimum                pension liability adjustment    |   |   | (412   | )      |   | ---    |   |   | --- |   |
| Total                                                                          |   | $      | 15,649 |   | $      | 13,614 |   | $ | 10,043 |   |

|                                    |   | 2005   |   | 2004   |   | 2003   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Taxes                currently payable: |   |   |   |   |   |   |   |   |   |   |
| Federal                                 |   | $      | 9,828  |   | $      | 11,132 |   | $ | 9,407 |   |
| State                and local          |   |   | 2,166  |   |   | 2,402  |   |   | 2,269 |   |
|                                    |   |   | 11,994 |   |   | 13,534 |   |   | 11,676 |   |
| Deferred                tax provision:  |   |   |   |   |   |   |   |   |   |   |
| Federal                                 |   |   | 1,509  |   |   | (170   | )      |   | (2,090 | ) |
| State                and local          |   |   | 2,514  |   |   | 78     |   |   | (463 | ) |
|                                    |   |   | 4,023  |   |   | (92    | )      |   | (2,553 | ) |
| Total                                   |   | $      | 16,017 |   | $      | 13,442 |   | $ | 9,123 |   |

|                                                              |   |  Percent                of Pretax Income |                  |
|-------------------------------------------------------------------|--------|-----------------------------------------------|-----------------------|
|                                                              |   | 2005                                          |                  | 2004 |   | 2003 |   |
| Federal                statutory rate                             |   |                                          | 35.0%                 |   |   | 35.0% |   |   | 35.0% |   |
| State                and local income taxes, net of               |   |                                          |                       |   |   |  |   |   |  |   |
|     federal                income tax benefit |   |                                          | 4.7                   |   |   |  4.5 |   |   | 4.7 |   |
| Reduction              in net deferred tax assets                 |   |                                          | 2.9                   |   |   | ---  |   |   | --- |   |
| Others                                                            |   |                                          | (0.1)                 |   |   | 0.6 |   |   | 0.6 |   |
| Tax                exempt interest exclusion                      |   |                                          | (2.4                ) |   |   | (2.5) |   |   | (3.7) |   |
| Dividends                received exclusion                       |   |                                          | (0.2                ) |   |   | (0.3) |   |   | (0.4) |   |
| Total                                                             |   |                                          | 39.9%                 |   |   | 37.3% |   |   | 36.2% |   |

----

|                                                                        |   |  December                31, |   |
|-----------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                        |   | 2005                              |   | 2004 |   |
| Deferred                tax assets:                                         |   |                              |   |   |   |
|     Other                postretirement benefits        |   | $                                 | 26,329 |   | $ | 23,676 |   |
|     Pension                benefits                     |   |                              | 1,038  |   |   | 7,602 |   |
|     Minimum                pension liability adjustment |   |                              | 412    |   |   | --- |   |
|     Inventories                                         |   |                              | 1,614  |   |   | 1,533 |   |
|     Annual                leave                         |   |                              | 2,052  |   |   | 2,354 |   |
|     Accounts                receivable allowances       |   |                              | 720    |   |   | 603 |   |
|     Medical                claims                       |   |                              | 1,255  |   |   | 1,179 |   |
|     Others                                              |   |                              | 1,468  |   |   | 2,108 |   |
| Total                deferred tax assets                                    |   |                              | 34,888 |   |   | 39,055 |   |
| Deferred                tax (liabilities):                                  |   |                              |   |   |   |   |   |
|     Capitalized                software                 |   |                              | (3,512 | ) |   | (4,441 | ) |
|     Deferred                selling expenses            |   |                              | (1,738 | ) |   | (1,377 | ) |
|     Others                                              |   |                              | (1,784 | ) |   | (1,728 | ) |
| Total                deferred tax (liabilities)                             |   |                              | (7,034 | ) |   | (7,546 | ) |
| Net                deferred tax assets                                      |   | $                                 | 27,854 |   | $ | 31,509 |   |

|                                                                                    |   |  2005 |   |  2004 |   |
|-----------------------------------------------------------------------------------------|--------|------------|--------|------------|--------|
|  Receivables:                                                                      |   |       |        |       |   |   |   |
|      Customers                                                 |   | $          | 37,363 |       | $      | 29,738 |   |
|      Others                                                    |   |       | 2,973  |       |   | 3,186 |   |
|      Allowance              for              doubtful accounts |   |       | (2,596 | )          |   | (2,097 | ) |
|  Total                                                                             |   | $          | 37,740 |       | $      | 30,827 |   |

----

|                                                                         |   | 2005   |   | 2004   |   |
|------------------------------------------------------------------------------|--------|--------|--------|--------|--------|
| Inventories:                                                                 |   |   |   |   |   |
|     Materials                and                supplies |   | $      | 1,856  |   | $      | 2,130 |   |
|     Work                in                process        |   |   | 308    |   |   | 304 |   |
|     Finished                goods                        |   |   | 1,042  |   |   | 1,101 |   |
| Total                                                                        |   | $      | 3,206  |   | $      | 3,535 |   |

|                                                                             |   | 2005   |    | 2004   |   |
|----------------------------------------------------------------------------------|--------|--------|---------|--------|--------|
| Property                and equipment, at cost:                                  |   |   |    |   |   |
|     Land                                                     |   | $      | 4,250   |   | $      | 4,250 |   |
|     Buildings                and                improvements |   |   | 51,759  |   |   | 51,759 |   |
|     Furniture                and                equipment    |   |   | 47,840  |   |   | 46,693 |   |
|     Accumulated                depreciation                  |   |   | (77,140 | )      |   | (74,405 | ) |
| Total                                                                            |   | $      | 26,709  |   | $      | 28,297 |   |

| Intangible                  and other assets                                               |   |   |    |   |   |
|--------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|
| Amortizable                  assets:                                                       |   | 2005   |    | 2004   |   |
|     Gross                  carrying amount--                           |   |   |    |   |   |   |   |
|         Software                                   |   | $      | 30,368  |   | $      | 29,208 |   |
|         Customer                  lists            |   |   | 13,733  |   |   | 13,733 |   |
|         Copyrights                                 |   |   | 9,145   |   |   | 9,145 |   |
|         Deferred                  pension expenses |   |   | 643     |   |   | --- |   |
|         Others                                     |   |   | 2,182   |   |   | 2,182 |   |
|                                                                                       |   |   | 56,071  |   |   | 54,268 |   |
| Accumulated                  amortization--                                                |   |   |    |   |   |   |   |
|         Software                                   |   |   | (19,247 | )      |   | (15,555 | ) |
|         Customer                  lists            |   |   | (12,285 | )      |   | (10,632 | ) |
|         Copyrights                                 |   |   | (4,716  | )      |   | (3,801 | ) |
|         Others                                     |   |   | (1,209  | )      |   | (1,043 | ) |
|                                                                                       |   |   | (37,457 | )      |   | (31,031 | ) |
|     Net                  intangible assets                             |   |   | 18,614  |   |   | 23,237 |   |
| Other                  assets                                                              |   |   | 899     |   |   | 141 |   |
| Total                                                                                      |   | $      | 19,513  |   | $      | 23,378 |   |

----

|                                                                            |   | 2005   |   | 2004   |   |
|---------------------------------------------------------------------------------|--------|--------|--------|--------|--------|
| Payables                and accrued liabilities:                                |   |   |   |   |   |   |   |
|     Accounts                payable                         |   | $      | 17,833 |   | $      | 18,324 |   |
|     Employee                compensation and benefits       |   |   | 15,804 |   |   | 15,239 |   |
|     Postretirement                benefits, current portion |   |   | 15,783 |   |   | 9,439 |   |
|     Income                taxes                             |   |   | 1,726  |   |   | 1,961 |   |
| Total                                                                           |   | $      | 51,146 |   | $      | 44,963 |   |

|                                                          |   |  December                31, |   |
|---------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                          |   | 2005                              |   | 2004 |   |
| Notes                payable, unsecured, 8.15%, due 2006-2010 |   | $                                 | 37,500 |   | $ | 45,000 |   |
| Notes                payable, unsecured, 6.99%, due 2007-2011 |   |                              | 25,000 |   |   | 25,000 |   |
| Total                term debt                                |   |                              | 62,500 |   |   | 70,000 |   |
| Less                current portion                           |   |                              | (7,500 | ) |   | (7,500 | ) |
| Long-term                portion                              |   | $                                 | 55,000 |   | $ | 62,500 |   |

*.      *

----

|                                             |   |  Treasury                Stock Shares |       |
|--------------------------------------------------|--------|--------------------------------------------|------------|
|                                             |   | Class                A                     |       | Class                B |   | Class                C |   |
| Balance,                January 1, 2003          |   |                                       | 14,664,851 |   |   | 6,350,449 |   |   | 1,229,359 |   |
| Sales                to employees                |   |                                       | (776,526   | ) |   | --- |   |   | --- |   |
| Repurchases                                      |   |                                       | 464,773    |   |   | 717,614 |   |   | 863,228 |   |
| Conversions                of Class A to Class B |   |                                       | 1,266,913  |   |   | (1,266,913 | ) |   | --- |   |
| Balance,                December 31, 2003        |   |                                       | 15,620,011 |   |   | 5,801,150 |   |   | 2,092,587 |   |
| Sales                to employees                |   |                                       | (560,355   | ) |   | --- |   |   | --- |   |
| Repurchases                                      |   |                                       | 812,230    |   |   | 1,255,756 |   |   | 426,653 |   |
| Conversions                of Class A to Class B |   |                                       | 473,375    |   |   | (473,375 | ) |   | --- |   |
| Balance,                December 31, 2004        |   |                                       | 16,345,261 |   |   | 6,583,531 |   |   | 2,519,240 |   |
| Sales                to employees                |   |                                       | (910,735   | ) |   | --- |   |   | --- |   |
| Repurchases                                      |   |                                       | 592,751    |   |   | 1,832,846 |   |   | --- |   |
| Conversions                of Class A to Class B |   |                                       | 1,021,449  |   |   | (1,021,449 | ) |   | --- |   |
| Balance,                December 31, 2005        |   |                                       | 17,048,726 |   |   | 7,394,928 |   |   | 2,519,240 |   |

----

|                                                           |   | 2005   |   | 2004   |   | 2003   |   |
|----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Holding                gains on securities                     |   |   |   |   |   |   |   |   |   |   |
|     arising                during the year |   | $      | 254    |   | $      | 884    |   | $ | 3,931 |   |
| Less                net gains included in net income           |   |   | 347    |   |   | 314    |   |   | 1,174 |   |
| Changes                in unrealized gains                     |   |   | (93    | )      |   | 570    |   |   | 2,757 |   |
| Less                income taxes                               |   |   | (33    | )      |   | 199    |   |   | 963 |   |
| Net                unrealized gains (losses)                   |   |   | (60    | )      |   | 371    |   |   | 1,794 |   |
| Currency                translation gains (losses)             |   |   | 220    |   |   | (77    | )      |   | (122 | ) |
| Less                income taxes                               |   |   | 77     |   |   | (27    | )      |   | (43 | ) |
| Net                currency translation gains (losses)         |   |   | 143    |   |   | (50    | )      |   | (79 | ) |
| Minimum                pension liability adjustment            |   |   | (1,009 | )      |   | ---    |   |   | --- |   |
| Less                income taxes                               |   |   | (412   | )      |   | ---    |   |   | --- |   |
| Net                minimum pension liability adjustment        |   |   | (597   | )      |   | ---    |   |   | --- |   |
| Other                comprehensive income (loss)               |   | $      | (514   | )      | $      | 321    |   | $ | 1,715 |    |

----

| Year                Ended December 31, 2005     |   | Publishing |    | Printing |   | Software |   | Total  |   |
|-------------------------------------------------|--------|------------|---------|----------|--------|----------|--------|--------|--------|
| Revenues                from external customers |   | $          | 272,021 |     | $      | 31,024   |   | $      | 25,985 |   | $ | 329,030 |   |
| Intersegment                revenues            |   |       | ---     |     |   | 10,773   |   |   | 2,416  |   |   | 13,189 |   |
| Operating                profit                 |   |       | 32,068  |     |   | 3,012    |   |   | 6,822  |   |   | 41,902 |   |
| Interest                expense                 |   |       | 6,032   |     |   | 9        |   |   | ---    |   |   | 6,041 |   |
| Identifiable                assets              |   |       | 275,252 |     |   | 18,427   |   |   | 41,650 |   |   | 335,329 |   |
| Depreciation                and amortization    |   |       | 7,659   |     |   | 921      |   |   | 1,182  |   |   | 9,762 |   |
| Capital                expenditures             |   |       | 2,025   |     |   | 889      |   |   | 22     |   |   | 2,936 |   |

| Year                Ended December 31, 2004     |   | Publishing |    | Printing |   | Software |   | Total  |   |
|-------------------------------------------------|--------|------------|---------|----------|--------|----------|--------|--------|--------|
| Revenues                from external customers |   | $          | 269,312 |     | $      | 26,814   |   | $      | 25,130 |   | $ | 321,256 |   |
| Intersegment                revenues            |   |       | ---     |     |   | 10,903   |   |   | 2,299  |   |   | 13,202 |   |
| Operating                profit                 |   |       | 31,727  |     |   | 392      |   |   | 5,833  |   |   | 37,952 |   |
| Interest                expense                 |   |       | 5,717   |     |   | 21       |   |   | ---    |   |   | 5,738 |   |
| Identifiable                assets              |   |       | 279,657 |     |   | 17,010   |   |   | 38,382 |   |   | 335,049 |   |
| Depreciation                and amortization    |   |       | 7,636   |     |   | 871      |   |   | 1,775  |   |   | 10,282 |   |
| Capital                expenditures             |   |       | 5,375   |     |   | 350      |   |   | 36     |   |   | 5,761 |   |

| Year                Ended December 31, 2003     |   | Publishing |    | Printing |   | Software |   | Total  |   |
|-------------------------------------------------|--------|------------|---------|----------|--------|----------|--------|--------|--------|
| Revenues                from external customers |   | $          | 266,447 |     | $      | 21,333   |   | $      | 24,044 |   | $ | 311,824 |   |
| Intersegment                revenues            |   |       | ---     |     |   | 12,536   |   |   | 2,507  |   |   | 15,043 |   |
| Operating                profit (loss)          |   |       | 24,386  |     |   | (283     | )      |   | 1,447  |   |   | 25,550 |   |
| Interest                expense                 |   |       | 5,815   |     |   | 50       |   |   | ---    |   |   | 5,865 |   |
| Identifiable                assets              |   |       | 286,514 |     |   | 17,023   |   |   | 35,531 |   |   | 339,068 |   |
| Depreciation                and amortization    |   |       | 9,034   |     |   | 901      |   |   | 4,357  |   |   | 14,292 |   |
| Capital                expenditures             |   |       | 4,759   |     |   | 183      |   |   | 476    |   |   | 5,418 |   |

----

|                                                          |   | 2005   |    | 2004   |   | 2003    |   |
|---------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| Total                interest expense for reportable segments |   | $      | 6,041   |   | $      | 5,738   |   | $ | 5,865 |   |
| Elimination                of intersegment interest expense   |   |   | (134    | )      |   | (118    | )      |   | (155 | ) |
| Consolidated                interest expense                  |   | $      | 5,907   |   | $      | 5,620   |   | $ | 5,710 |   |
|                                                          |   |   |    |   |   |    |   |   |   |   |
| Total                assets for reportable segments           |   | $      | 335,329 |   | $      | 335,049 |   | $ | 339,068 |   |
| Elimination                of intersegment assets             |   |   | (19,767 | )      |   | (16,702 | )      |   | (8,786 | ) |
| Consolidated                assets                            |   | $      | 315,562 |   | $      | 318,347 |   | $ | 330,282 |   |

----

| Column                  A                                    |   | Column                  B   |   | Column                  C   |   | Column                  D   |   | Column                  E |                     |
|--------------------------------------------------------------|--------|-----------------------------|--------|-----------------------------|--------|-----------------------------|--------|---------------------------|--------------------------|
|                                                         |   |                        |   | Additions                   |   |                        |   |                      |                     |
|                                                         |   |                        |   | (1)                         |   | (2)                         |   |                      |                     |   |   |
|                                                         |   |                        |   |                        |   | Charged                  to |   |                      |                     |   |   |
|                                                         |   | Balance                  at |   | Charged                  to |   | Other                       |   |                      |                     | Balance                  at |   |
|                                                         |   | Beginning                   |   | Costs                  and  |   | Accounts--                  |   | Deductions--              |                     | End                  of |   |
| Description                                                  |   | of                  Period  |   | Expenses                    |   | Describe                    |   | Describe                  |                     | Period |   |
|                                                         |   |                        |   |                        |   |                        |   |                      |                     |   |   |
| VALUATION                  ACCOUNTS DEDUCTED                 |   |                        |   |                        |   |                        |   |                      |                     |   |   |
| FROM                  ASSETS TO WHICH THEY APPLY:            |   |                        |   |                        |   |                        |   |                      |                     |   |   |
|                                                         |   |                        |   |                        |   |                        |   |                      |                     |   |   |
| Allowance                  for Doubtful Accounts Receivable: |   |                        |   |                        |   |                        |   |                      |                     |   |   |
| Year                  ended December 31, 2005                |   | $                           | 2,097  |                        | $      | 537                         |   | $                         | 190                  (a  | ) | $ | 228                  (b | ) | $ | 2,596 |   |
| Year                  ended December 31, 2004                |   |                        | 2,135  |                        |   | 917                         |   |                      | (52)                  (a | ) |   | 903                  (b | ) |   | 2,097 |   |
| Year                  ended December 31, 2003                |   |                        | 2,015  |                        |   | 755                         |   |                      | 272                  (a  | ) |   | 908                  (b | ) |   | 2,135 |   |
|                                                         |   |                        |   |                        |   |                        |   |                      |                     |   |   |   |   |   |   |   |
| Allowance                  for Obsolete Inventory:           |   |                        |   |                        |   |                        |   |                      |                     |   |   |   |   |   |   |   |
| Year                  ended December 31, 2005                |   | $                           | 561    |                        | $      | 27                          |   |                      |                     |   |   |   |   | $ | 588 |   |
| Year                  ended December 31, 2004                |   |                        | 535    |                        |   | 26                          |   |                      |                     |   |   |   |   |   | 561 |   |
| Year                  ended December 31, 2003                |   |                        | 448    |                        |   | 87                          |   |                      |                     |   |   |   |   |   | 535 |   |
|                                                         |   |                        |   |                        |   |                        |   |                      |                     |   |   |   |   |   |   |   |
| Allowance                  for Deferred Tax Assets:          |   |                        |   |                        |   |                        |   |                      |                     |   |   |   |   |   |   |   |
| Year                  ended December 31, 2005                |   | $                           | 473    |                        | $      |                        |   |                      |                     |   |   | 473                (c  |  ) | $ | --- |   |
| Year                  ended December 31, 2004                |   |                        | 430    |                        |   | 43                          |   |                      |                     |   |   |   |   |   | 473 |   |
| Year                  ended December 31, 2003                |   |                        | 317    |                        |   | 113                         |   |                      |                     |   |   |   |   |   | 430 |   |

----

*Internal        Control - Integrated Framework. *

----

**"I.        Election of Directors"**
**"Biographical        Sketches of Nominees,"**

*www.bna.com*
*.        *

**"III.        Executive Compensation"**
**"V.        Employee Benefit Plans"**

**"I.        Election of Directors"**

**"III.        Executive Compensation"**

**"IV.        Audit Committee Report"**

----

| (a)                    (1)       | Financial                    Statements                                                                                   | Page   |
|----------------------------------|---------------------------------------------------------------------------------------------------------------------------|--------|
|                             | Reports                    of Independent Registered Public Accounting Firm                                               | 16     |
|                             |                                                                                                                      |   |
|                             | Condolidated                    Statements of Income for each                                                             |   |
|                             |     of                    the                    three years ended December 31, 2005, 2004 , and 2003 | 18     |
|                             |                                                                                                                      |   |
|                             | Balance                    Sheets as of December 31, 2005 and 2004                                                        | 19     |
|                             |                                                                                                                      |   |
|                             | Consolidated                    Statements of Cash Flows, and Consolidated                                                |   |
|                             |     Statements                    of                    Changes in Stockholders’ Equity and     |   |
|                             |     Comprehensive                    Income for each of the years                                     |   |
|                             |     ended                    December 31, 2005, 2004 and 2003                                         | 21     |
|                             |                                                                                                                      |   |
|                             | Notes                    to Consolidated Financial Statements                                                             | 24     |
|                             |                                                                                                                      |   |
|     (2)      | Financial                    Statement Schedule:                                                                          |   |
|      II | Valuation                    and Qualifying Accounts and Reserves                                                         |   |
|                             |     For                    the                    years ended December 31, 2005, 2004, and 2003       | 39     |

----

| (a)                    (3) | Exhibits                                                                                                                        |
|----------------------------|---------------------------------------------------------------------------------------------------------------------------------|
|                       |                                                                                                                            |
| 3.1                        | Certificate                    of Incorporation, as amended*                                                                    |
|                       |                                                                                                                            |
| 3.2                        | By                    laws, as amended.**                                                                                       |
|                       |                                                                                                                            |
| 11                         | Statement                    re: Computation of Per Share Earnings is contained in the                    2005                  |
|                       | Consolidated                    financial Statements in the Notes to Consolidated  Financial                    Statements |
|                       |                                                                                                                            |
| 21                         | Subsidiaries                    of Registrant.***                                                                               |
|                       |                                                                                                                            |
| 31.1                       | Certification                    of the Chief Executive Officer pursuant to Section 302                                         |
|                       | Of                    the Sarbanes-Oxley Act of 2002, 18 U.S.C. section 1350.                                                   |
|                       |                                                                                                                            |
| 31.2                       | Certification                    of the Chief Financial Officer pursuant to Section 302                                         |
|                       | Of                    the Sarbanes-Oxley Act of 2002, 18 U.S.C. section 1350                                                    |
|                       |                                                                                                                            |
| 32.1                       | Certification                    of the Chief Executive Officer pursuant to Section 906                                         |
|                       | Of                    the Sarbanes-Oxley Act of 2002, 18 U.S.C. section 1350                                                    |
|                       |                                                                                                                            |
| 32.2                       | Certification                    of the Chief Financial Officer pursuant to Section 906                                         |
|                       | Of                    the Sarbanes-Oxley Act of 2002, 18 U.S.C. section 1350                                                    |
|                       |                                                                                                                            |
| 99.1                       | Proxy                    Statement for the Annual Meeting of security                    holders to be held April 15, 2006****  |
|                       |                                                                                                                            |
| *                          | Incorporated                    by reference to the Company’s 2001 Form 10-K                                              |
|                       | Commission                    File Number 2-28286, filed on March 29, 2002.                                                     |
|                       | The                    exhibit number indicated above corresponds to the                                                        |
|                       | exhibit                    number in that filing.                                                                               |
|                       |                                                                                                                            |
| **                         | Incorporated                    by reference to the 8K filed by the Company on                                                  |
|                       | September                    8, 2005. The exhibit number indicated above corresponds                                            |
|                       | to                    the exhibit number in that filing.                                                                        |
|                       |                                                                                                                            |
| ***                        | Filed                    herewith                                                                                               |
|                       |                                                                                                                            |
| ****                       | Incorporated                    by reference to the Company’s Definitive Proxy Statement                    to            |
|                       | be                    filed with the SEC within 120 days of December 31,                    2005.                               |
|                       |                                                                                                                            |
|                       | Upon                    written or oral request to the Company’s General Counsel, a                    copy               |
|                       | of                    any of the above exhibits will be furnished at                    cost.                                   |

----

|  By:  s/Paul N. Wojcik                                                                               | By:   s/George                    J.                    Korphage                                     |
|----------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|
|          Paul N.                      Wojcik                      |          George                    J. Korphage,                        |
|          President                    and Chief Executive Officer |          Vice                    President and Chief Financial Officer |
|          Director                                                 |         (Chief                    Acounting Officer)                        |
|                                                                                                           |          Director                                                      |
|                                                                                                           |                                                                                                                |
|  Date:  03/09/06                                                                                     |  Date: 03/09/06                                                                                           |

|  By:              s/Sandra Degler                                                                       |  3/09/06  |  By:               s/Gregory C. Mcaffrey                                      |  03/09/06 |
|--------------------------------------------------------------------------------------------------------------|----------------|-----------------------------------------------------------------------------------------|----------------|
|         Sandra              C.              Degler              |  Date     |          Gregory              C. McCaffrey |  Date     |
|         Chairman              of the              Board of Directors |           |          Director                          |           |
|                                                                                                         |           |                                                                                    |           |
|  By:              s/Paul A. Blakely                                                                     |  03/09/06 |  By:               s/Jonathan Newcomb                                         |  03/09/06 |
|          Paul              A.              Blakely              |  Date     |          Jonathan              Newcomb     |  Date     |
|          Director                                               |           |          Director                          |           |
|                                                                                                         |           |                                                                                    |           |
|  By:              s/Cynthia J. Bolbach                                                                  |  03/09/06 |  By:               s/Susan E. Rice                                            |  03/09/06 |
|          Cynthia              J. Bolbach                        |  Date     |          Susan                E. Rice      |  Date     |
|          Director                                               |           |          Director                          |           |
|                                                                                                         |           |                                                                                    |           |
|  By:              s/Eunice Lin Bumgardner                                                               |  03/09/06 |  By:               s/Ellen Taus                                               |  03/09/06 |
|          Eunice              Lin Bumgardner                     |  Date     |          Ellen              Taus           |  Date     |
|          Director                                               |           |          Director                          |           |
|                                                                                                         |           |                                                                                    |           |
|  By:               s/Neil R. Froemming                                                             |  03/09/06 |  By:               s/Daneil W. Toohey                                         |  03/09/06 |
|          Neil              R. Froemming                         |  Date     |          Daniel              W. Toohey     |  Date     |
|          Director                                               |           |          Director                          |           |
|                                                                                                         |           |                                                                                    |           |
|  By:              s/Gerald S. Hobbs                                                                     |  03/09/06 |  By:               s/Robert L. Velte                                          |  03/09/06 |
|          Gerald              S. Hobbs                           |  Date     |          Robert              L. Velte      |  Date     |
|          Director                                               |           |          Director                          |           |
|                                                                                                         |           |                                                                                    |           |
|  By:               s/Margaret S. Hullinger                                                         |  03/09/06 |                                                                                    |           |
|          Margaret              S. Hullinger                     |  Date     |                                                                                    |           |
|          Director                                               |           |                                                                                    |           |

----

| Number                         |   | Exhibit                Description                                                                                                    | Sequential                Page |
|--------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|
|                           |   |                                                                                                                                  |  Number                   |
|                           |   |                                                                                                                                  |                           |
| 3.1                            |   | Certificate                of Incorporation, as amended                                                                               |  *                        |
|                           |   |                                                                                                                                  |                           |
|     3.2    |   | By                laws, as amended                                                                                                    |  *                        |
|                           |   |                                                                                                                                  |                           |
|     11     |   | Statement                re: Computation of Per Share Earnings is contained in the                2005                                |                           |
|                           |   |     Consolidated                financial Statements in the Notes to Consolidated  Financial                 |                           |
|       |   |     Statements              ,              Note 12 "Stockholders Equity,"                                         | 36                             |
|                           |   |                                                                                                                                  |                           |
|     21     |   | Subsidiaries                of Registrant                                                                                             | 46                             |
|                           |   |                                                                                                                                  |                           |
|     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.                      | 47                             |
|                           |   |                                                                                                                                  |                           |
|     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                       | 48                             |
|                           |   |                                                                                                                                  |                           |
|     32.1   |   | Certification                of the Chief Executive Officer pursuant to Section 906                                                   |                           |
|                           |   |     of                the Sarbanes-Oxley Act of 2002, 18 U.S.C. section 1350                                      | 49                             |
|                           |   |                                                                                                                                  |                           |
|     32.2   |   | Certification                of the Chief Financial Officer pursuant to Section 906                                                   |                           |
|                           |   |     of                the Sarbanes-Oxley Act of 2002, 18 U.S.C. section 1350                                      | 50                             |
|                           |   |                                                                                                                                  |                           |
|     99.1   |   | Proxy                Statement for the Annual Meeting of security holders to be held April                15,                2006**** |                           |
|                           |   |                                                                                                                                  |                           |
| *                              |   | Incorporated                by reference to the Company’s 2001 Form 10-K                                                        |                           |
|                           |   | Commission                File Number 2-28286, filed on March 29, 2002.                                                               |                           |
|                           |   | The                exhibit number indicated above corresponds to the                                                                  |                           |
|                           |   | exhibit                number in that filing.                                                                                         |                           |
|                           |   |                                                                                                                                  |                           |
|  **                       |   | Incorporated              by reference to the 8-K filed by the Company                                                                |                           |
|                           |   | September              8, 2005. The exhibit number indicated above corresponds the                                               |                           |
|                           |   | exhibit              number in that filing.                                                                                           |                           |
|                           |   |                                                                                                                                  |                           |
|  ***                      |   | The              Definitive Proxy Statement is expected to be filed with                                                              |                           |
|                           |   | the                SEC within 120 days of December 31, 2005.                                                                          |                           |
|                           |   |                                                                                                                                  |                           |

----