The 2003 National Assessment of Adult Literacy (NAAL) assessed the English literacy skills of a nationally representative sample of 18,500 U.S. adults (age 16 and older) residing in private households. NAAL is the first national assessment of adult literacy since the 1992 National Adult Literacy Survey (NALS). The NAAL and NALS produced direct estimates of Prose, Document, and Quantitative literacy, each reported on a 0 to 500 scale and on four performance levels: Below Basic, Basic, Intermediate, and Proficient based on this scale. This report, describes the statistical methodology used to produce the model-dependent (indirect) estimates of the percentages of adults at the lowest literacy level for individual states and counties for 1992 and 2003. The measure chosen for the indirect estimation is the percentage of adults lacking Basic prose literacy skills (BPLS). The literacy of adults who lack BPLS ranges from being unable to read and understand any written information in English to being able to locate easily identifiable information in short, commonplace prose text, but nothing more advanced. It should be noted that adults who were not able to take the assessment because they were not able to communicate in English or Spanish (i.e. language barrier cases) are included in the indirect estimates and classified as lacking BPLS because they can be considered to be at the lowest level of English literacy. Three appendices are included: (1) 2003 NAAL predictor variable sources; (2) Indirect estimates of the percentage lacking Basic prose literacy skills and corresponding credible intervals, by state: 2003; and (3) Indirect estimates of the percentage lacking Basic prose literacy skills and corresponding credible intervals, by state: 1992. (Contains 70 footnotes, 2 figures and 21 tables.) [Additional BPLS information is available at: http://nces.ed.gov/naal/estimates/index.aspx]